China's foreign debt rises but at slower pace
Source: Shanghai Daily Date: 2006-06-28
China's foreign debt edged up 2.4 percent to US$288 billion in the first quarter as the country continued to tighten controls on overseas borrowing to head off an influx of speculative funds from overseas.
The quarterly growth figure was below the 13.6 percent rise for all of 2005 and the 18.6 percent climb in 2004, according to data released yesterday by the State Administration of Foreign Exchange.
"The scale of foreign debt is increasing steadily, but its expansion rate is dropping," SAFE said in a statement.
Short-term foreign debt inched up 3.1 percent in the first three months to US$161 billion, accounting for 56 percent of China's total, the statement said.
Medium-and-long-term foreign debt increased 1.6 percent during the period to US$127 billion.
China began taking administration action in 2004 to restrict borrowing from overseas under an effort to counter a speculative wave of hot-money betting on a stronger yuan.
Commercial banks are required to set up special accounts for foreign inflows exceeding US$200,000, a move that helps regulators better monitor foreign-currency movements.
China had posted US$875 billion in foreign exchange reserves by the end of the first quarter, surpassing Japan's as the world's No. 1 forex holder. The growth was spurred largely by mounting exports and foreign investments.
The buildup in the trade surplus has stirred tension between China and Western trade partners who argue the world's fourth-biggest economy is keeping the value of its currency artificially low.
The Chinese yuan has appreciated 1.39 percent to nearly 8 per US dollar since it was freed from its peg to the greenback and revalued by 2.1 percent to 8.11 per dollar on July 21, 2005.
To ease the forex accumulation, the central government in April started to let pilot banks help local citizens buy foreign exchange and invest in overseas fixed-income and money market products.
