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.
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