China's Foreign Debt Jumps, but 'Poses No Threat'

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Last updated at: (Beijing Time) Thursday, September 11, 2003

China's Foreign Debt Jumps, but 'Poses No Threat'

China's foreign debt rose rapidly and the portion of short-term liabilities grew in the first half of the year, but the situation poses no threat to the nation's foreign debt security, the State Administration of Foreign Exchange (SAFE) said Wednesday.

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China's outstanding foreign debts stood at 182.57 billion US dollars (excluding those in Hong Kong, Macao and Taiwan regions) at the end of June this year, a growth of 8.33 percent from the end of 2002, the State Administration of Foreign Exchange (SAFE) announced Wednesday.

It included 118.38 billion dollars of long- and medium-term debts and 64.2 billion dollars of short-term debts, 2.82 billion and 11.21 billion dollars respectively more than the figures at the end of last year.

Short-term foreign debts should be serviced within one year and long- and medium-term ones can be serviced beyond one year.

A spokesman for SAFE said that China's foreign debt size was still "below the danger line" and the added share of short-term debts would not exert a fundamental impact on the country's foreign debt situation as a whole.

"In the first half of 2003, China's foreign debts rose relatively quickly, both in terms of the outstanding amount and new loans. In particular, the portion of short-term debts increased", he said.

He noted that China now boasts a strong ability to service debts with abundant foreign exchange reserves.

China's foreign exchange reserves soared by 42.7 percent on a year-on-year basis to US$346.5 billion at the end of June. "The relatively high portion of short-term debts has no essential effect on China's foreign debt security, and China's foreign debts, overall, are within safe boundaries,'' the spokesman said.

China's outstanding foreign debts and new debts both recorded big increases in the first six months, especially with short-term debts rising, which has aroused concern from relevant state departments.

From January to June, China's new debts reached 42.18 billion dollars and debts serviced stood at 38.36 billion dollars.

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