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China's short-term foreign debt rises
By Louise Ho |
December 28, 2011, Wednesday
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Print Edition
CHINA'S outstanding foreign debt surged to US$697.2 billion at the end of September from US$642.5 billion in June, the State Administration of Foreign Exchange said yesterday.
Short-term foreign debt rose to US$507.6 billion at the end of September from US$462 billion at the end of June, SAFE said in a statement on its website.
Short-term foreign debt, with a maturity of less than a year, accounted for 72.81 percent of the total foreign debt.
Trade-related credit, including loans provided by overseas sellers to domestic buyers and advance payment made by overseas importers, totaled US$374.9 billion and accounted for over 70 percent of short-term foreign debt.
SAFE said as most of the trade credit and financing is related to the growth in China's imports and exports "the rise of trade-related foreign debt will not affect China's debt security," SAFE said.
Dollar-denominated debts accounted for 75.8 percent of the total at the end of September, down from 78 percent at the end of June. Yen debts took up 8.11 percent of the total at the end of September, and euros amounted to 7.21 percent.
The amount of short-term debt has been growing at 18.2 percent annually, faster than the 11.7 percent growth in total external debt. The rise in short-term debt is mainly due to fast-growing trade and hopes for the yuan to rise, said Li Chao, deputy director of SAFE.
Speaking at a forum in Beijing earlier this month, Li also said China should be alert to its rising short-term external debt because the ratio of this type of debt to its total foreign debt is one of the highest in the world.
However, Li said that the current structure of China's foreign debt is sound and overall risk is under control as the country holds US$3.2 trillion in foreign exchange reserves.
Dagong Global Credit Rating, a domestic rating agency, estimated that until the end of June China's foreign exchange reserves are 6.9 times its short-term foreign debt, the highest among the countries it has assessed.
Short-term foreign debt rose to US$507.6 billion at the end of September from US$462 billion at the end of June, SAFE said in a statement on its website.
Short-term foreign debt, with a maturity of less than a year, accounted for 72.81 percent of the total foreign debt.
Trade-related credit, including loans provided by overseas sellers to domestic buyers and advance payment made by overseas importers, totaled US$374.9 billion and accounted for over 70 percent of short-term foreign debt.
SAFE said as most of the trade credit and financing is related to the growth in China's imports and exports "the rise of trade-related foreign debt will not affect China's debt security," SAFE said.
Dollar-denominated debts accounted for 75.8 percent of the total at the end of September, down from 78 percent at the end of June. Yen debts took up 8.11 percent of the total at the end of September, and euros amounted to 7.21 percent.
The amount of short-term debt has been growing at 18.2 percent annually, faster than the 11.7 percent growth in total external debt. The rise in short-term debt is mainly due to fast-growing trade and hopes for the yuan to rise, said Li Chao, deputy director of SAFE.
Speaking at a forum in Beijing earlier this month, Li also said China should be alert to its rising short-term external debt because the ratio of this type of debt to its total foreign debt is one of the highest in the world.
However, Li said that the current structure of China's foreign debt is sound and overall risk is under control as the country holds US$3.2 trillion in foreign exchange reserves.
Dagong Global Credit Rating, a domestic rating agency, estimated that until the end of June China's foreign exchange reserves are 6.9 times its short-term foreign debt, the highest among the countries it has assessed.
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