China's foreign borrowings jumped a massive 215.43 percent in
the first quarter of 2005 compared to the same period last
year.
The State Administration of Foreign Exchange (SAFE) said
yesterday that China's overseas borrowings in the first three
months of the year totaled US$76.8 billion.
Repayments jumped 280 percent year-on-year to US$73 billion,
leaving a net foreign debt increase of US$3.16 billion, down 34.19
percent from a year earlier.
At the end of March, China's total foreign debt stood at
US$233.4 billion, up 2.11 percent from the end of last year.
"The size of China's foreign debt continued to climb in the
first quarter of 2005, but at a slower pace," SAFE said in a
statement. "Foreign debt flows maintained an upward trend, while
the proportion of short-term debt rose marginally."
Outstanding short-term debts stood at US$107.9 billion,
accounting for 46.22 percent of the total foreign debt.
SAFE did not provide any explanation for the increases in
foreign debt during the first quarter.
Previously, SAFE attributed a similar pattern last year to the
nation's robust economic growth and expectations of a revaluation
of the renminbi or Chinese yuan.
China's foreign borrowing last year was double the 2003 figure,
with growth particularly rapid in short-term debts.
Net foreign debt more than tripled during the year as borrowing
largely outpaced repayments.
China's economy grew by 9.5 percent last year, and continued at
the same pace in the first quarter of this year.
Analysts say ongoing tightening measures by the government have
caused funding difficulties for many local businesses, pushing them
to increase loans from overseas.
Continued speculation on an appreciation of the renminbi was
also seen as a major driving force behind the foreign debt
increase. Speculative capital that sneaks in as "trade credits" is
usually categorized as a short-term debt.
(China Daily June 8, 2005)