By the end of March 2014, China's foreign exchange reserves have reached USD3.95 trillion, there is an increase of USD129 billion from December 2013. ANBOUND research team believes that China’s foreign exchange reserves maintained a strong growth despite capital outflow in emerging countries and arbitrage funds drawn back by RMB depreciation, showed that investors are confident towards long term RMB appreciation. However, there is still a huge scale of arbitrage funds and the expectation on RMB bi-directional fluctuation has not been established.