China's Outstanding Foreign Debt Reaches USD1.56 Trillion at End Q2, up 8.7% Compared to Q1, SAFE Says
Xu Wei
/SOURCE : Yicai
China's Outstanding Foreign Debt Reaches USD1.56 Trillion at End Q2, up 8.7% Compared to Q1, SAFE Says

(Yicai Global) Sept. 29 -- China's outstanding foreign debt, including yuan-denominated and foreign currency-denominated debt, hit USD1.5628 trillion (CNY10.4118 trillion) as of the end of June, up 8.7 percent or USD125 billion compared to the end of March, China's State Administration of Foreign Exchange (SAFE) said on its website today.

Increases in foreign debts held by banks accounted for 70 percent of the increase seen in the second quarter, as lenders borrowed low-cost funds from overseas to develop the country's trade and the real economy according to the macro-prudential policy framework related to cross-border financing.

Chinese banks held USD768.3 billion of foreign debt at the end of the second quarter, accounting for 49 percent of the total, compared with USD679.5 billion three months earlier, or 47 percent of the total.

China's foreign debt has maintained steady growth this year, while on an economic level, it is moving in a positive direction overall, the forex regulator said.

Gross domestic product grew 6.9 percent annually in the first half, and imports and exports rose 19.6 percent, providing a basis for a sustained increase in foreign debt.

The country's state bank, the People's Bank of China and SAFE have further improved macro-prudential management policy on cross-border financing and given banks and firms more leeway to take on foreign debt, SAFE added.

Overall, solid economic conditions are in place to facilitate growth in China's foreign debt, which is set to continue rising steadily. SAFE will continue to watch for changes in foreign debt, guard against foreign debt risks and safeguard national economic and financial security while continually promoting cross-border investment and financing facilitation.

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Keywords: Foreign Debt , SAFE