Abstract: This paper makes a measure of China's financial stability index through a mixed-frequency dynamic factormodel based on the EM algorithm from the function-exerting ability and shock resistance ability. Using a combinationof time-varying Granger causality test and conditional dynamic spillover index method, we examine the impact of sixinput risk factors on China's financial stability and test the effectiveness of macroprudential policies in dealing withthe transmission of input risk factors. The study shows that: Firstly, against the background of the "dual circulation"hina's financial system function exerting ability and its resilience in the face of unexpected shocks have significantlyincreased, and shock resistance ability has shown smallfluctuations in the short term. China's financial stability hasot been continuously affected by economic and financial events such as public health emergency and geopoliticalconfrontation, and generally shows a stable and positive trend. Secondly, with the sound optimization of China'sfinancial system, although the spillover effects of input risk factors on financial stability still show significant time-varying characteristics, they are gradually stable on the whole. Thirdly, there are phased and target-specific features inthe regulatory effects of macroprudential policy instruments on the function-exerting ability and shock resistanceability of the financial system, which can help China's financial system to effectively cope with the spillover effects ofglobal financial cyce and public health emergency. These findings provide useful references for coordinating thesituations at home and abroad, and for better safeguarding national financial security in the process ofcomprehensively expanding financial openness.