Rising short-term foreign debt manageable: Official
(Xinhua)
Updated: 2006-05-15 16:07
A Chinese central bank spokesman has said risks associated with the country's
rising short-term foreign debts are manageable.
At the end of 2005, China reported a surplus of foreign debt of 281.05
billion U.S. dollars (not including Hong Kong, Macao and Taiwan), a rise of
33.55 billion U.S. dollars or 13.6 percent over a year ago.
Of the total amount, short-term foreign debt surplus reached 156.14 billion
U.S. dollars, a rise of 32.94 billion dollars over the previous year, accounting
for 55.6 percent of the total, show government statistics.
"The growth of trade credits, with a contribution of 77.1 percent, are the
major reason for the growth of short-term foreign debts," said the spokesman.
China's trade credit surplus rose 28 percent year-on-year to 90.8 billion
U.S. dollars at the end of 2005, accounting for 32.3 percent in foreign debt,
which is 5.9 percentage points higher than a year ago.
The fast growth of trade credits is closely related with soaring foreign
trade which brings greater demand for financing, explained the spokesman.
Such credits would not cause large sum of unexpected capital flow and their
large share of foreign debt could help to avoid financial risks, he said.
China has plenty of foreign exchange reserves and the ratio of foreign
exchange reserves to short-term foreign debts is within secure limits, said the
spokesman.
The central bank has also strengthened its early warning system for the
management of foreign debts to prevent financial risks and therefore, short-term
foreign debts are within manageable limits, he said.
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