China's outstanding foreign debt stood at US$202.3 billion at the end of March, up 4.5 percent from the same period last year, said the State Administration of Foreign Exchange (SAFE) on Tuesday.??

New borrowings from overseas, excluding trade credits, totaled US$24.4 billion for the first three months of this year.

 

Outstanding long and medium-term liabilities were US$120.0 billion at the end of March, or nearly 60 percent of total outstanding foreign debt. The remainder was short-term liabilities.

 

The continued growth in the size of China's foreign debt was mainly the result of factors such as rapid growth in the domestic economy and foreign trade, according to a SAFE press release.

 

The interest rate differentials between Chinese and international markets, which put persistent upward pressure on the domestic currency, the renminbi, was a "negligible" force behind the growth of foreign debt.

 

Short-term foreign debt has grown relatively fast in recent months as domestic financial institutions increasingly preferred US dollar loans to renminbi borrowings. But regulators have insisted the current level of China's short-term foreign liabilities poses no danger to its financial security, given the nation's huge foreign exchange reserves.

 

(China Daily June 30, 2004)