Signal Portfolio flows were 36.9% of China's inflows before the contraction

Summary

Before its contraction, China drew an unusually large share of its foreign capital through portfolio investment. From 2017 to 2020, portfolio flows made up 36.9 percent of inflows to China, more than a third and high compared with other developing economies. When all types of inflows to China fell in the following period, FDI declined least, by $5.9 billion. Portfolio inflows dropped by $14.1 billion and bank-related and other inflows by $9.7 billion. As a result, China's retreat raised the FDI share both for China and for developing economies overall, changing the composition as well as the volume of capital.