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China Foreign Debt Rises In Q2 As Banks Increase Borrowing

     BEIJING(MNI) - China's total outstanding foreign debt rose to $1.563
trillion at the end of June, the State Administration of Foreign Exchange (SAFE)
said Friday, up from $1.438 trillion at the end of March.
     "Foreign debt has grown steadily this year. Solid domestic economic growth
has laid the foundation a constant rise of the foreign debt amount," SAFE said
on its website on Friday. "The People's Bank of China and SAFE have worked
together to improve the macro-prudential management of cross-border funding and
enlarge the space for banks and companies to issue foreign debt, helping to
lower the funding costs of the real economy sector."
     Banks' foreign debt holdings contributed the most to the increase, SAFE
numbers showed. Banks' outstanding foreign debt rose to $768.3 billion as of the
the end of June, up substantially from $679.5 billion at the end of March.
     "Banks have made the best use of foreign funding, which has lowered costs
in the second quarter to serve overseas trading and the development of the real
economy," SAFE said.
     Outstanding government foreign debt was $140.2 billion as of the end of
June, up from $122.6 billion in March.
     Outstanding short-term foreign debt increased to $1.01 trillion in June,
compared with $916.4 billion in March. Short-term foreign debt related to trade
accounted for 39% of the total in June, down from 44% in March.
     Outstanding long-term foreign debt edged up to $554.9 billion at the end of
June, up from $521.4 billion at the end of March.
     "We expect the foreign debt to grow steadily in the future," SAFE said.
"And we will continue to observe the changes in foreign debts to make
cross-border funding and investments more convenient and efficiently prevent
foreign debt risks and protect the safety of China's finance system and
--MNI Beijing Bureau; +86 10 85325998; email:
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
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