China's foreign debt keeps on rising

As learned from the State Administration of Foreign Exchange (SAFE) by the end of March this year, China recorded 202.31 billion USD for its balance of foreign debts (foreign debts of Hong Kong, Macao and Taiwan not included). That was an increase of 8.687 billion USD, or 4.49 percent, over the figure by the end of last year.

New borrowings from overseas, excluding trade credits, totalled 24.4 billion USD for the first three months of this year. The outstanding volume of long and medium-term liabilities were US$120 billion at the end of March, or nearly 60 per cent of total outstanding foreign debts, while the rest was short-term liabilities.

Analysts from SAFE attributed the fast growth of China's economy and foreign trade to its rising foreign debts. Besides that, interests rate differential between Chinese currency and forex is still wide. The yuan is still under pressure of appreciation. This is another factor which brings foreign debts and deserves special attention.

Short-term foreign debts have grown relatively fast during recent months as domestic financial institutions increasingly preferred US dollar loans to renminbi borrowings, but regulators have insisted the current level of China's short-term foreign liabilities poses no danger to its financial security, given the nation's huge foreign exchange reserves.

By People's Daily Online