China: SAFE data suggest increased FX inflows in August

Our preferred FX flow measure shows net FX inflows of US$55bn in August 2026 (vs. US$7bn inflows in July). The current account channel showed US$62bn FX inflows in August, while the portfolio investment channel saw some FX outflows. In August, we saw US$50bn net inflows via onshore outright spot transactions, and US$7bn inflows via freshly entered and canceled forward transactions; another SAFE dataset on cross-border RMB flows showed outflows of US$2bn. Goods trade saw a net inflow of US$75bn, with the FX conversion ratio rising to 63% (vs. 54% in July and 58% in Q2). Services trade deficit-related FX outflows narrowed to US$10bn, and income and transfers showed a US$3bn outflow. Portfolio investment saw US$7bn FX outflows, with North-Bound Bond Connect outflows of US$3bn and net foreign receipts indicating US$27bn outflows. Official FX reserves rose to US$3,438bn from US$3,419bn;