The State Administration of Foreign Exchange: It is expected that China's foreign debt scale will continue to remain stable

According to the Zhitong Finance APP, the State Administration of Foreign Exchange recently announced the foreign debt data for China as of the end of September 2024. Li Bin, Deputy Director and Spokesperson of the State Administration of Foreign Exchange, answered reporters' questions regarding related issues. Li Bin stated that it is expected that China's foreign debt scale will continue to remain stable. From the external environment, since 2024, developed economies such as the US and Europe have cut interest rates multiple times, and the cost of foreign currency financing is expected to gradually decrease; from the internal environment, China's economic foundation is stable, with many advantages, strong resilience, great potential, and the supporting conditions and basic trends for long-term improvement have not changed. The Central Economic Work Conference has clearly stated that next year, more proactive and effective macro policies will be implemented to promote the continuous recovery and improvement of the economy, which will help maintain the stability of China's foreign debt scale.

The original text is as follows:

Li Bin, Deputy Director and Spokesperson of the State Administration of Foreign Exchange, answers reporters' questions regarding China's foreign debt data as of the end of September 2024

Recently, the State Administration of Foreign Exchange announced the foreign debt data for China as of the end of September 2024. Li Bin, Deputy Director and Spokesperson of the State Administration of Foreign Exchange, answered reporters' questions regarding related issues.

Question: What is the situation of China's foreign debt in the third quarter of 2024?

Answer: In the third quarter of 2024, China's foreign debt scale slightly decreased, while the structure remained stable. As of the end of September 2024, China's total (including both domestic and foreign currency) foreign debt balance was USD 25,169 billion, a decrease of USD 2.84 billion from the end of June 2024, a decline of 1.1%. From the currency structure perspective, domestic currency debt accounted for 50%, an increase of 1 percentage point from the end of June 2024; from the maturity structure perspective, medium and long-term foreign debt accounted for 43%, a decrease of 1 percentage point from the end of June 2024.

Question: How do you view the current situation of China's foreign debt?

Answer: The decrease in the foreign debt scale is mainly affected by the decline in the balance of foreign currency debt. Due to factors such as relatively high foreign currency financing costs, as of the end of the third quarter of 2024, the balance of domestic currency debt increased by 1.9% month-on-month, while the balance of foreign currency debt decreased by 3.9%, leading to a slight overall decline in the total foreign debt balance.

It is expected that China's foreign debt scale will continue to remain stable. From the external environment, since 2024, developed economies such as the US and Europe have cut interest rates multiple times, and the cost of foreign currency financing is expected to gradually decrease; from the internal environment, China's economic foundation is stable, with many advantages, strong resilience, great potential, and the supporting conditions and basic trends for long-term improvement have not changed. The Central Economic Work Conference has clearly stated that next year, more proactive and effective macro policies will be implemented to promote the continuous recovery and improvement of the economy, which will help maintain the stability of China's foreign debt scale.

The State Administration of Foreign Exchange announces China's total foreign debt data as of the end of September 2024

As of the end of September 2024, China's total (including both domestic and foreign currency) foreign debt balance was 176,371 billion RMB (equivalent to USD 25,169 billion, excluding external liabilities of Hong Kong SAR, Macao SAR, and Taiwan).

From the maturity structure perspective, the balance of medium and long-term foreign debt was 76,642 billion RMB (equivalent to USD 10,937 billion), accounting for 43%; the balance of short-term foreign debt was 99,729 billion RMB (equivalent to USD 14,232 billion), accounting for 57%. Among the short-term foreign debt balance, trade-related credit accounted for 33% From the perspective of institutional sectors, the balance of broad government external debt is 30,186 billion yuan (equivalent to 4,308 billion USD), accounting for 17%; the balance of central bank external debt is 6,498 billion yuan (equivalent to 927 billion USD), accounting for 4%; the balance of bank external debt is 77,649 billion yuan (equivalent to 11,081 billion USD), accounting for 44%; the balance of external debt from other sectors (including loans between affiliated companies) is 62,037 billion yuan (equivalent to 8,853 billion USD), accounting for 35%.

From the perspective of debt instruments, the balance of loans is 25,678 billion yuan (equivalent to 3,664 billion USD), accounting for 15%; the balance of trade credit and prepayments is 27,007 billion yuan (equivalent to 3,854 billion USD), accounting for 15%; the balance of currency and deposits is 33,035 billion yuan (equivalent to 4,714 billion USD), accounting for 19%; the balance of debt securities is 61,838 billion yuan (equivalent to 8,825 billion USD), accounting for 35%; the allocation of Special Drawing Rights (SDR) is 3,441 billion yuan (equivalent to 491 billion USD), accounting for 2%; the balance of inter-company loans is 17,843 billion yuan (equivalent to 2,546 billion USD), accounting for 10%; the balance of other debt liabilities is 7,529 billion yuan (equivalent to 1,074 billion USD), accounting for 4%.

From the perspective of currency structure, the balance of domestic currency external debt is 88,761 billion yuan (equivalent to 12,667 billion USD), accounting for 50%; the balance of foreign currency external debt (including SDR allocation) is 87,610 billion yuan (equivalent to 12,502 billion USD), accounting for 50%. Among the registered foreign currency external debt, USD debt accounts for 80%, EUR debt accounts for 8%, JPY debt accounts for 5%, HKD debt accounts for 4%, and the combined proportion of SDR and other foreign currency external debt is 3%.

All major indicators of China's external debt are within internationally recognized safety lines, and the overall risk of China's external debt is controllable.

This article is compiled from the "State Administration of Foreign Exchange official website"; edited by Zhitong Finance: Xu Wenqiang.