(Recasts with SAFE comment)
BEIJING, March 31 China's foreign exchange
regulator said on Monday that it does not see any risk in the
country's relatively high ratio of short-term foreign debt to
total foreign debt, noting that the country had a large pile of
foreign reserves to fall back on.
China's outstanding short-term foreign debt accounted for 78
percent of total outstanding foreign debt at the end of last
year, SAFE said.
The figure is higher than the internationally accepted
safety line of 25 percent.
But Guo Song, deputy director of the capital account
management department at SAFE, said China has large foreign
exchange reserves and the ratio between short-term debt to the
reserves was only 17.7 percent.
"I cannot see any problem or risks in having a 78 percent
short-term foreign debt to total foreign debt ratio, as we are
focusing more on the ratio between short-term debt to forex
reserves, which was at 17.7 percent at the end of 2013 " Guo
"Overall, we can say that the foreign debt risk in China is
decreasing," he added.
SAFE said that China's total outstanding foreign debt stood
at $863.2 billion at the end of December 2013, of which $676.6
billion was short-tem debt.
The country's foreign exchange reserves stood at $3.82
trillion at the end of December, the largest reserves in the
Concern has grown in recent months over the size of China's
domestic debt pile, which coupled with a slowing economy has
sparked talk of the government stepping in to prop up growth.
China saw its first ever domestic bond default earlier this
month, when Shanghai Chaori Solar Energy Science and Technology
Co Ltd failed to make an interest payment on a bond
it issued in 2012..
(Reporting by Aileen Wang and Jonathan Standing; Editing by Kim