The State Administration of Foreign Exchange (SAFE) has recently released the data on external debt as at the end of September 2018. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on relevant issues.

Q: Could you brief us on China's external debt for the third quarter of 2018?

A: China witnessed growth in external debt for the third quarter of 2018. As at the end of September, China's full-scale outstanding external debt (including foreign currencies) amounted to USD 1.9132 trillion, up by USD 42.7 billion or 2.3% from the end of June, mainly due to the growth of the balance of trade credit and prepayment and of debt securities.

Q: What are the main reasons for the growth of China’s outstanding external debt in the third quarter?

A: First, the scale of China’s import and export trade increased steadily in the third quarter. In particular, the import trade increased by nearly 19% from the same period last year, and the balance of trade financing increased accordingly. Second, in recent years, with the gradual acceleration of China’s bond market opening to the outside world, foreign investors have continued to increase their holdings of domestic bonds, and the proportion of debt securities in China’s full-scale external debt has been rising steadily. As of the end of September 2018, the proportion of debt securities was 22.4%.

As the global economic situation faces many uncertainties in the future, the SAFE will continue to closely monitor changes in external debt situations, guard against risk of cross-border capital flows and safeguard national economic and financial security.