A plane flies over Shanghai. Photo: iStock

China’s financial stability is improving, and the likelihood of an economic-hard landing has declined for the near term, according to Bloomberg Intelligence economics’ China Financial Stability Index.

Slower capital outflows, tighter monetary conditions and a stable stock market were the main drivers of improved stability, while lower inflation and higher interbank rates weighed in the other direction.

Early data suggest the trend towards increased stability will continue into the second quarter, though at a slower pace.