According to a report in China Daily on February 14, 2026
China began 2026 with a strong expansion in domestic credit, while new data also show a sharp rebound in foreign direct investment (FDI) last year — developments that together suggest improving macro stability despite persistent external headwinds.
According to the People’s Bank of China, new yuan-denominated loans totaled 4.71 trillion yuan (US$679 billion) in January alone, reflecting seasonal front-loading but also solid demand for financing at the start of the year.
Aggregate financing to the real economy — a broad measure of credit that includes bank lending, bond issuance and shadow-banking components — reached a record 7.22 trillion yuan for the month.
Outstanding yuan loans rose 6.1% year-on-year to 276.62 trillion yuan, while broad money supply (M2) expanded 9% to 347.19 trillion yuan.
For global investors, the January data reinforce three signals:
Liquidity conditions remain supportive.
Credit transmission to the real economy is functioning.
Authorities are prioritizing stability over aggressive tightening.
Foreign Investment Shows Structural Recovery
Separate data from the State Administration of Foreign Exchange indicate that net FDI inflows into China quadrupled in 2025.
On a balance-of-payments basis, China recorded US$76.5 billion in net direct investment inflows, compared with just US$18.6 billion in 2024.
At the same time, China’s direct investment deficit — the gap between outbound and inbound investment — narrowed sharply to US$82 billion from US$153.7 billion a year earlier.
This rebound occurred despite ongoing tariff pressures and technology export restrictions from the United States, suggesting that multinational corporations are adjusting to China’s evolving growth model rather than retreating from it.
Analysts attribute the recovery to:
Targeted policy measures to stabilize foreign investment
Continued market opening in select sectors
Stronger-than-expected macro resilience
Corporate adaptation to China’s shift toward innovation-driven growth
For global firms, the trend suggests selective re-engagement rather than wholesale decoupling.
External Balance Remains Strong
China also posted a current account surplus of US$734.9 billion in 2025, including a goods trade surplus of over US$1 trillion.
On a renminbi basis, the current account surplus equaled roughly 3.7% of GDP, up from 2.2% in 2024.
While robust exports supported the surplus, policymakers have emphasized that maintaining balance — rather than maximizing surplus — remains the objective. Officials have pointed to efforts to expand imports and deepen services-sector opening to ease structural imbalances.
For currency markets, the combination of:
Solid credit growth
Recovering FDI inflows
A sizable current account surplus
provides underlying support for renminbi stability, even amid global volatility.
What This Means for Global Investors
Taken together, the latest data suggest a macro environment characterized by:
- Controlled monetary accommodation
Liquidity is ample but not excessively expansionary.
- Improving capital inflow dynamics
FDI recovery signals renewed corporate confidence.
- Strong external buffers
A sizable current account surplus provides resilience.
- Policy focus on stability
Authorities appear committed to maintaining balanced growth rather than pursuing aggressive stimulus.
The key question for 2026 will be whether credit growth translates into stronger domestic demand and whether the FDI rebound proves durable amid geopolitical uncertainties.
For now, the data indicate that China is entering the year with firmer financial footing than many investors anticipated.