The State Administration of Foreign Exchange (SAFE) has recently released the data on external debt at the end of March 2022. The SAFE deputy administrator and press spokesperson Wang Chunying answered media questions on the relevant issues.
Q: Could you brief us on China’s external debt in the first quarter of 2022?
A: In the first quarter of 2022, the scale of China’s external debt was overall stable with a slight decrease. By the end of March 2022, the full-scale outstanding external debt (including domestic and foreign currencies) reached USD 2.7102 trillion, representing a decline of USD 36.4 billion or 1% from the end of 2021.
The external debt structure remained stable. With respect to currency structures, at the end of March 2022, the outstanding external debt in domestic currency accounted for 45% of China’s full-scale external debt. In terms of maturity structure, the outstanding medium-and-long-term external debt accounted for 47%. Both the proportion of the outstanding external debt in domestic currency and that of the outstanding medium-and-long-term external debt are unchanged from the end of 2021.
Q: What measures has the SAFE taken to facilitate cross-border financing of enterprises?
A: Recently, in order to thoroughly implement the decisions and arrangements of the CPC Central Committee and the State Council, and to better serve the development of the real economy, the SAFE has taken various measures to facilitate cross-border financing for enterprises. On April 18, the PBC and the SAFE issued the Notice on Strengthening Financial Services for COVID-19 Containment and Socio-Economic Development, which put forward a number of facilitating measures, such as supporting one single external debt account for multiple external debts of non-financial enterprises and supporting enterprises in their application for foreign debt registration online, etc. On May 31, the SAFE issued the Notice on Supporting High-tech and “Professional, Refined, Specific, and Novel” Enterprises to Carry out the Pilot Program on Facilitating the Cross-border Financing, aiming at expanding the scope of pilot program on facilitating the cross-border financing and helping more high-tech and “professional, refined, specific, and novel” enterprises to autonomously borrow external debt within a certain amount, in support of the innovation and development of these enterprises.
In the next step, the SAFE will more intensively implement the policies that have already been issued, and continuously improve the convenience of cross-border financing for enterprises, so that qualified enterprises can all enjoy these policy benefits.
Q: What would you say about China’s external debt situations?
A: At present, China’s external debt risks are generally under control. In the first quarter of 2022, the scale of China’s external debt decreased slightly. This is main caused by the decrease in the purchase of RMB bonds and non-resident deposits by foreign investors due to the complex and volatile external environment. The main indicators of China’s external debt are all within the internationally recognized thresholds, and the risks of external debt are generally under control.
The scale of external debt is expected to stay stable in the future. Unstable and uncertain factors are still seen in the external environment, but China has sustained its strong resilience, great potential in economy with its fundamentals of sound long-term growth unchanged. At the meantime, China’s continuous promotion of high-level opening to the outside world will continue to attract foreign capital, especially international long-term capital, and it is expected that the scale of foreign debt will remain stable in the future. The SAFE will keep adhering to the coordinated development and safety, continue to improve the facilitation of cross-border investment and financing, and effectively support the high-quality development of the real economy.
