China’s foreign debt fell slower in the first quarter as its debt structure improved, indicating a stabler cross-border capital flow, the State Administration of Foreign Exchange said yesterday.
At the end of March, China’s outstanding foreign debt totaled US$1.36 trillion, down 3.6 percent from the end of last year, SAFE said in a statement yesterday.
The decline in the first three months narrowed 3.8 percentage points from the fourth quarter’s drop.
SAFE said the structure of China’s foreign debt is improving with more longer-term debts and the recent debt decline was in line with cooler foreign trade.
SAFE said China’s foreign debt size is set to stabilize according to recent data and the credit risks are controllable.
The proportion of short-term foreign debt fell by 8 percentage points to 62 percent of the total from the end of last year, while that of medium and long-term debt rose 4 percentage points to 38 percent, SAFE said.
The repayment by Chinese companies of their foreign debts along with the yuan’s recent depreciation have contributed to a dramatic capital outflow from the country.
The fall in trade-related financing activities contributed 66 percent of the total foreign debt decline in the first quarter.
In May, China began to monitor cross-border financing under a new system that will help stabilize foreign debts, SAFE said.