China’s outstanding foreign debt below safety zone

China's outstanding foreign debt reached 5.26 trillion yuan ($863.2 billion) by the end of 2013, an increase of 17 percent from the figure in 2012, the country's foreign exchange regulator said on Monday.

Most of the external debt was in the form of short-term borrowing, with long- and medium-term foreign debt standing at just 1.14 trillion yuan.

The short-term foreign debt came in at 4.12 trillion yuan, accounting for over 78 percent of the total, the State Administration of Foreign Exchange (SAFE) said in a statement posted on its website Monday.

The total foreign debt does not include the borrowings from Taiwan, as well as Hong Kong and Macao special administrative regions.

The SAFE said that it does not see any risk in the nation's relatively high ratio of short-term external debt in the total amount, citing a large pile of foreign exchange reserves, though the figure is higher than the international alert level of 25 percent.

Since 2001, the ratio has increased from 41 percent to the current 78 percent, but this did not indicate any risks in the Chinese market, said Guo Song, deputy director with the capital account management department of the SAFE, according to media reports.

During a press conference Monday, Guo said that what matters is the ratio of short-term foreign debt to foreign reserves, which was only 17.7 percent last year, down from 39 percent in 2001 and much lower than the international safety line of 100 percent, according to media reports Monday.

The People's Bank of China disclosed in January that China's foreign exchange reserves reached $3.82 trillion by the end of 2013.

Moreover, most short-term external debt is related to foreign trade, which is unlikely to cause debt risks, according to Guo.

Of the total outstanding external debt, registered foreign debt was 3.21 trillion yuan. And the balance of trade credit between enterprises came in at 2.05 trillion yuan.

As for currency structure, 79.6 percent of the outstanding registered foreign debt was denominated in US dollars, and while that in Japanese yen and euros accounted for 5.02 percent and 5.54 percent respectively.

According to a preliminary calculation, the SAFE said that the country's foreign liability ratio stood at 9.4 percent, debt-to-GDP ratio was 35.59 percent, and debt-service ratio was 1.57 percent. And all of these figures were below the internationally accepted safety range.