China expects long-term capital inflows to return despite recent volatility

A number of foreign investment banks and research institutions pointed out heavier capital outflows from China after the start of Russia's invasion of Ukraine

China's currency regulator expects foreign investments in yuan-denominated assets to increase over the long run, despite recent fluctuations, financial media outlet Caixin reported on Thursday.

The remarks came as foreign investors trimmed their holdings of Chinese government bonds at the fastest rate in three years in February, while major economies including the United States tightened monetary policy, prompting market concerns about higher capital outflows and yuan depreciation.

"Short-term fluctuations in cross-border securities investments do not mean a reversal of the long-term trend of foreign investment into China's capital market," the State Administration of Foreign Exchange (SAFE) was quoted as saying.

"Affected by recent