See: China capital outflow pressure persists.
Good news: Chinese reported foreign exchange reserves reversed recent direction and recovered in March and April.
Bad news: The falling dollar, triggered by the US Federal reserve’s no stationary interest rate policy, helps stem the flow.
Even worse news: If you take account of updated valuation of the dollar since its slide began, the actual flow of funds from China’s FX reserve did continue to contract: by $54bn.
At some point this year the Fed will raise rates again. The dollar’s fall will halt; it most likely will rise in value and with, that great big sucking sound will again reverberate around the world. Capital will flow towards the stronger dollar, the yuan and various assorted emerging markets will come under strain and China will again, in earnest, use its FX reserve to slow the yuan’s fall.
Add to this the current moribund state of the global economy and their can only be one outcome: ongoing imbalances across major economies and no sign of the necessary collaboration to regenerate growth.