Ouyang Xiaohong/Text

China's open narrative seems to be shifting from macro country integration to micro subject behavior integration.

In the second week of April 2026, two seemingly ordinary cross-border financial transactions quietly settled on the map of China's financial reform and opening up.

In Hangzhou, the Zhejiang branch of Bank of China processed the province's first overseas listed share reduction registration for domestic enterprise shareholders; In Shanghai, Bank of China Shanghai Branch assisted a biopharmaceutical company in completing the "full circulation" registration of 180 million H-shares, which was the first transaction in Shanghai after the implementation of the "Notice on the Management of Overseas Listing Funds for Domestic Enterprises".

These first transactions may not be surprising in terms of amount alone, but the signals of institutional change behind them are not simple, collectively pointing to the emerging "new ecology" of China's capital account: a systematic project that bids farewell to the "pipeline construction" thinking and enters the "ecological optimization" stage.

17 years ago, there was also a phenomenon of "multiple intensive icebreakers" on the map of China's financial opening-up. 2009 was the year when the pilot program for RMB settlement in cross-border trade was launched, and it is also regarded as the "payment year" of RMB internationalization.

Opening up is also reform, integrating reform into opening up. In the annals of financial openness, 2026 is destined to be a significant milestone.

Zhu Hexin, Vice Governor of the People's Bank of China and Director of the State Administration of Foreign Exchange, proposed at the 2026 China Development Forum to "deepen the high-level institutional opening-up of the foreign exchange field" and build a "more convenient, open, secure, and intelligent" foreign exchange management system and mechanism for the "15th Five Year Plan".

If the realization of RMB current account convertibility in 1996 solved the problem of "how to smoothly integrate payments and trade into the world", then the pilot program for cross-border RMB settlement in 2009 answered the question of "how to truly use RMB for cross-border transactions"; If the QDII (Qualified Domestic Institutional Investor) system in 2006 responded to the question of "how to enable Chinese capital and investors to access and participate in the global market", then the new regulations for managing overseas listed funds in 2026 and their rapid implementation in multiple regions point to a more complex and profound issue - how to integrate financing, reduction, full circulation, repatriation, accounts, statistical reporting, and banking development capabilities into a smoother, more secure, and controllable institutional ecosystem after Chinese companies, capital, and investors have deeply embedded themselves in the global market?

One

From the first small beginnings one can see how things will develop.

In April 2026, there will be two first transactions, one in Zhejiang and the other in Shanghai.

It may seem like this is just an update to the banking process, but looking at it in the context of the system means something completely different. In December 2025, the People's Bank of China and the State Administration of Foreign Exchange jointly issued the "Notice on Relevant Issues Concerning the Management of Funds for Overseas Listing of Domestic Enterprises", which will come into effect on April 1, 2026. The new regulations specify that registration for overseas listings, changes in registration, repatriation of raised funds, reduction of domestic shareholders' holdings, full circulation of H-shares, repurchases, delisting, and other matters will be included in a more unified fund management framework. A large number of standardized registration matters will be delegated from the State Administration of Foreign Exchange to banks for direct processing.

Zhejiang and Shanghai are not isolated cases. After the implementation of the new regulations, the first batch of demonstration cases have blossomed in many places. Qingdao has completed the first foreign exchange registration business for overseas listed shareholders of domestic enterprises to reduce their holdings after the implementation of the new regulations; Yunnan Jinxun Resources achieved compliant repatriation of approximately HKD 1.1 billion raised funds after its IPO on the Hong Kong stock market; Nanping, Fujian has processed the first overseas listing registration of a domestic enterprise for Impression Dahongpao; Naqu, Xizang, completed the first capital account overseas listing registration of the first overseas listed enterprise. The emergence of "first orders" and "first transactions" almost simultaneously in coastal open areas, resource-based provinces, cultural and tourism cities, and plateau areas means that this round of reform is not a single point experiment, but has strong replicability and diffusion power.

From this, it can be seen that the facilitation of capital projects is moving from institutional texts to local practices, from policy abstraction to business reality, and from regulatory perspectives to perceived time cost reductions for enterprises.

However, if this round of reform is only seen as "delegating foreign exchange registration authority to banks", the understanding is superficial and underestimates its profound changes.

China's capital project management is undergoing a change in governance philosophy. The old paradigm is more like a general gate: emphasizing pre-approval, departmental supervision, and case by case handling, with the core being to first stabilize traffic and direction. This logic is necessary in the early stages of opening up, as capital account opening is naturally more sensitive than goods trade and current account opening. Setting boundaries first and then discussing convenience is a prudent institutional sequence.

In the view of Lu Jing, the President of Standard Chartered Bank (China), 2026 will be a year of significant institutional openness in China's financial sector. This systematic leap will also reshape the global role of the renminbi. The internationalization of the Renminbi is entering a 2.0 window period centered on the improvement of financial functions.

Go with the flow, change with the times. When cross-border economic activities reach their current depth, the core contradiction has already shifted. The real needs of enterprises have already surpassed the stage of "whether they can go out for financing", but have advanced to how to issue more shares, reduce holdings, fully circulate, repurchase, delist, and more smoothly allocate raised funds and shareholder income between domestic and foreign accounts after listing. For this kind of "business closed loop" that almost covers the entire life cycle of overseas listing of enterprises, it is difficult to meet the triple goals of enterprise timeliness, market expectations, and risk control solely through window approval and departmental segmentation.

So, a new ecosystem began to emerge: banks became the front desk, taking on more responsibilities for business development review, authenticity verification, and customer service; Regulatory oversight has gradually shifted from "approval on a case by case basis" to "unified rules, account constraints, statistical penetration, macro prudence, and post monitoring"; Enterprises can obtain smoother paths, but the prerequisite is that the trajectory of capital flow must be clearer, more reportable, and more traceable.

This is not about 'reducing management', but about 'changing management methods' - from' single point approval management 'to' chain penetration governance '.

Two

The green mountains cannot cover it, after all, it flows eastward.

On April 8, 2009, the executive meeting of the State Council decided to launch a pilot program for cross-border trade settlement in RMB in Shanghai, Guangzhou, Shenzhen, Zhuhai, and Dongguan in Guangdong Province. By August 2011, the pilot area within the country had been expanded to cover the entire country. The internationalization of the RMB has entered a stage known as the "payment year": moving from a "valuation unit" to a "settlement currency". At that time, after the international financial crisis, the liquidity of the US dollar tightened, and China promoted the cross-border use of its currency as a trading power and surplus country to reduce exchange rate risks.

On February 26, 2026, the People's Bank of China issued new regulations to support banking and financial institutions to conduct RMB cross-border interbank financing business with overseas institutions, aiming to develop the RMB offshore market and improve cross-border capital flow management.

On March 20, 2026, the People's Bank of China and the State Administration of Foreign Exchange jointly issued the "Management Measures for Overseas Loans of Domestic Enterprises", which unified the management of domestic and foreign currencies and raised the macro prudential adjustment coefficient to facilitate enterprises' "going global".

On April 1, 2026, the "Notice on Relevant Issues Concerning the Management of Funds for Overseas Listing of Domestic Enterprises" came into effect, marking the further inclusion of relevant cross-border equity fund flows into a more standardized and penetrable statistical and management framework.

At the same time, discussions on high-level openness and institutional openness are also continuing to heat up. High level institutional openness ultimately needs to be built on a stable domestic financial environment and a solid foundation of the real economy. Currently, whether it is changes in the credit structure or an increase in the proportion of government bonds, they are all indicating a fact: China's financial opening has entered a deep water zone - no longer just pursuing scale expansion, but stronger regulatory opening, institutional opening, high-level opening, and two-way controllability.

In 2009, when the pilot program was launched, the proportion of RMB cross-border settlement was still very low, which was more reflected as an institutional breakthrough and policy guidance; 17 years later, the Chinese yuan has firmly become one of the world's major payment currencies. The current dynamic adjustment of the capital account between "tightening" and "loosening", such as the tightening of QDII quotas and the facilitation of reducing holdings and returning funds, is more like a vortex and reef in the process of "flowing eastward".

Today, the "two-way valve" of China's capital account is being more finely tuned - from "encouraging outflow" to "facilitating reflux", and then to institutional opening.

If we say that in 2009, the solution was the facilitation of "trade" - allowing the RMB to "go out" to buy goods; So, the key to tackling in 2026 is the institutional opening-up under the "capital account" - enabling smoother connection between domestic and foreign financing, overseas return of income, and cross-border fund allocation.

Within the macroprudential riverbed, China's financial opening-up is continuing to deepen in the direction of serving high-quality development by integrating reform with opening-up.

Three

Without taking small steps, one cannot reach a thousand miles.

Today, the way and technique of Chinese capital 'going global' have changed, and the logic of 'bringing in' is also being reshaped.

This round of reform is not just about updating the foreign exchange system, there is also a larger reality behind it: the logic of Chinese enterprises going global has changed. In the past 20 years, the most common scenario of Chinese capital "going global" has been selling goods, building factories, contracting projects, and acquiring resources. Nowadays, more and more Chinese companies are establishing regional headquarters, research and development centers, brand channels, and industrial chain nodes in Southeast Asia, the Middle East, Latin America, and other places. At the same time, they are starting to use tools such as overseas listing, cross-border financing, overseas mergers and acquisitions, and regional fund coordination more frequently. China International Capital Corporation (CICC) proposed in its research article "Twenty Years of Chinese Investment Going Global to Southeast Asia: From Going Global to Integrating" that in the past 20 years, cooperation between China and Southeast Asia has expanded from commodity trade to four levels: industrial investment, enterprise localization, and capital linkage. In 2024, China's direct investment in ASEAN reached 34.36 billion US dollars, a year-on-year increase of 36.8%.

This means that the demand for capital account system from enterprises is also upgrading. Enterprises not only need to 'bring money out', but also need to 'put equity changes, fundraising, regional settlements, shareholder reductions, and capital inflows into a stable and predictable institutional framework'. In other words, the globalization lifecycle of enterprises is forcing the capital account to upgrade from channel logic to ecological logic.

The year 2026 marks the 30th anniversary of China's current account convertibility, which is an important step in the opening up of China's foreign exchange sector and a milestone in China's opening-up to the outside world. Zhu Hexin stated that China adheres to a steady and orderly approach and continues to promote capital account convertibility. Mature one, promote one, starting from the qualified institutional investor system, deepening the reform of direct investment management, improving macro prudential management of cross-border financing, and then building a cross-border securities investment interconnection mechanism.

On the timeline, in 1996, China accepted Article 8 of the International Monetary Fund Agreement, realizing the convertibility of the renminbi's current account (liberalization of payments for goods and services trade). Currently, over 90% of China's capital projects have achieved varying degrees of openness.

In April 2006, the QDII system was officially launched. In the initial stage, it was limited to commercial banks' overseas wealth management services for clients, and the investment scope was restricted (mainly investing in fixed income products), resulting in a flat market response. After the relaxation of policies in 2007, the issuance of bank QDII products and fund QDII increased significantly. As of the end of March 2026, the cumulative approved quota of QDII has risen to 176.169 billion US dollars, and the size of public QDII funds has exceeded one trillion yuan. This number indicates that China's open narrative is no longer limited to enterprises and regulatory authorities, but has also deeply integrated into the asset allocation behavior of residents and institutions.

The coordinated promotion of RMB internationalization and capital account opening requires bold ideas, careful verification, and simultaneous research and deployment with deep-seated reforms, "said Guan Tao, Global Chief Economist of Bank of China Securities.

2026 is the beginning year of the 15th Five Year Plan and a year with multiple historical coordinates: the 30th anniversary of China's current account convertibility and the 20th anniversary of the launch of the QDII system. 30 years ago, China solved the problem of how to connect to the global payment and trade system through institutional channels; 20 years ago, China began to answer how institutions and residents can enter the global market, learn cross-border allocation and risk pricing; Today, with the implementation of new regulations on the management of overseas listed funds in multiple regions, the opening of capital accounts is further shifting from "channel construction" to "ecological optimization".

If in the past we built "pipelines" to control traffic, now we are building an "ecosystem": more unified rules, more active entities, smoother circulation, smarter supervision, and more coordinated goals.

The reduction registration in Zhejiang and the full circulation of H-shares in Shanghai are early signals of the operation of this new ecosystem. When residents and businesses can manage cross-border assets through smarter mechanisms, the "green mountains" (short-term adjustments and confidence tests) will eventually dissolve in institutional evolution, and the "eastward flow" (RMB internationalization and high-level financial opening) will be the historical river.

Today's flowing water, before the bright moon. Short term fluctuations, long-term direction. Facing the "15th Five Year Plan", the "new ecology" of China's capital account has emerged.