As at the end of March 2020, China recorded RMB 14.8403 trillion in outstanding external debt denominated in both domestic and foreign currencies (equivalent to USD 2.0946 trillion, excluding those of Hong Kong SAR China, Macao SAR China, and Taiwan Province China, the same below).

With respect to the term structure, the outstanding medium-and long-term external debt was RMB 6.226 trillion (USD 878.7 billion), accounting for 42%; while the outstanding short-term external debt was RMB 8.6143 trillion (USD 1.2159 trillion), taking up 58%, including 40% trade-related credit.

In terms of institutions and sectors, the outstanding debt of government totaled RMB 1.9573 trillion(USD 276.2 billion), accounting for 13%; the outstanding debt of the central bank totaled RMB 355.7 billion (USD 50.2 billion), accounting for 2%; the outstanding debt of banks totaled RMB 6.873 trillion (USD 970.1 billion), taking up 46%; the outstanding debt of other sectors(including inter-company lending under direct investments) totaled RMB 5.6543 trillion (USD 798.1 billion), taking up 39%.

In terms of debt instruments, the outstanding of loans was RMB 3.3271 trillion (USD 469.6 billion), accounting for 22%; the outstanding of trade credit and prepayment was RMB 2.3147 trillion (USD 326.7billion), accounting for 16%; the outstanding of currency and deposits was RMB 3.2767 trillion (USD 462.5 billion), accounting for 22%; the outstanding of debt securities was RMB 3.7848 trillion (USD 534.2 billion), accounting for 25.5%; the Special Drawing Rights (SDR) allocation amounted to RMB 67.6 billion (USD 9.5 billion), accounting for 0.5%. The outstanding debt of inter-company lending under direct investments totaled RMB 1.7086 trillion (USD 241.2 billion), accounting for 12%; and the outstanding of other debt liabilities was RMB 360.8 billion (USD 50.9 billion), accounting for 2%.

With respect to currency structures, the outstanding external debt in domestic currency totaled RMB 5.575 trillion (USD 786.9 billion), accounting for 38%; the outstanding external debt in foreign currencies (including SDR allocation) totaled RMB 9.2653 trillion (USD 1.3077 trillion), accounting for 62%. In the total outstanding registered external debt in foreign currencies, the USD debt accounted for 83%, the Euro debt accounted for 7%, the HKD debt accounted for 5%, the JPY debt accounted for 2%, the SDR and other foreign currency-denominated external debt accounted for 3%.

China’s major external debt metrics were all within the internationally recognized thresholds, indicating that the external debt risk is controllable on the whole.

Appendix

Definition of terms and interpretations

External debt classification by term structure. There are two methods to classify the external debt by term structure. One is on the basis of the contract term,i.e. it is classified as medium- and long-term external debt if the contract term is over one year, and classified as short-term external debt if the contract term is one year or less; the other is on the basis of the remaining term, i.e.,on the basis of the contract term classification method above, the medium- and long-term external debt due within one year is classified as short-term external debt. In this news release, external debt is divided into medium- and long-term external debt and short-term external debt based on the contract term.

Trade-related credit is a broad concept. In addition to trade credit and prepayment, it also involves other kinds of credit provided for trade activities. As it is defined, trade-related credit includes trade credit and prepayment, bank trade financing, short-term notes related to trade, and so forth. In particular, trade credit and prepayment refer to external liability arising from directly extending credit between the seller and buyer of goods transactions, specifically transactions between residents in the Chinese Mainland and overseas non-residents (including non-residents in Hong Kong SAR, Macao SAR, and Taiwan Province), i.e., the debt incurred due to the difference between the time of payment and the time of the goods ownership transfer, which include credit directly provided by the supplier (e.g., the overseas exporter) for goods and services, and advance payments made by buyers(e.g., overseas importers) for goods, services, and on-going business (or business to be undertaken). Bank trade financing refers to trade related loans that offered by a third party(e.g., banks) to exporters or importers, for instance, loans extended by foreign financial institutions or export credit agencies to buyers.