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People's Daily Online>>China Business

Foreign debt quota for banks rises

By Hu Xiaocen (Shanghai Daily)

16:58, March 30, 2012

THE National Development and Reform Commission has raised the medium and long-term foreign debt quota for foreign banks in China to US$24 billion, allowing them to channel more money into the country to meet loan and investment demand.

"The foreign debt quota was in a downward spiral in the past, now the government is helping banks to boost lending from offshore by upward adjustment as China's economy slows down," a foreign bank source told Shanghai Daily yesterday.

The NDRC, China's top economic planning body, made the move after China's foreign direct investment fell in February for the fourth straight month to US$7.73 billion, down 0.9 percent from the same period of last year. The FDI also fell from US$10 billion in January, the Ministry of Commerce said.

The NDRC said raising the foreign debt quota aims to "promote opening-up of the financial sector, give a bigger role to foreign banks in capital flows and push forward domestic economic development."

The NDRC also announced the six participants in the pilot project for the quota increase - HSBC Holdings Plc, Deutsche Bank AG, JPMorgan, Citigroup, Sumitomo Mitsui Banking Corp and Bank of East Asia, according to a statement on its website.

Another foreign bank source said that the government is taking measures to boost capital inflows into the country.

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