Foreign debt jumps, but 'poses no threat' ( 2003-09-11 07:11) (China Daily)
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.
China's outstanding foreign debts totalled US$182.6 billion at the end of
June, up 8.33 per cent from the end of last year, the administration said.
Short-term debts stood at US$64.2 billion, 35.2 per cent of the total, while
long and medium-term loans totalled US$118.4 billion.
The country took out new foreign loans worth US$42.2 billion in the first six
months of the year, SAFE said.
"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," the administration said in a press
release.
"This situation has caught the attention of related departments in the
country," it said without elaborating.
The administration attributed the rise in foreign debts to the continued
growth of the Chinese economy and the spread in interest rates between domestic
and international markets.
A series of interest rate cuts in the international market over the past few
years have resulted in interest rates in China being higher than those in many
other countries.
But SAFE said the situation is nothing to worry about, as China has
sufficient foreign exchange reserves and a strong ability to clear foreign
debts.
China's foreign exchange reserves soared by 42.7 per cent 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," SAFE said.