MNI POLICY: Chinese corporate Foreign Debt To Stabilise Growth

China will encourage domestic companies' to use their medium and long-term foreign debt to expand inflows of longer term capital, promoting investment and stabilising growth, said Meng Wei, spokeswoman of the National Development and Reform Commission at a briefing on Monday.

Chinese corporates' foreign debt rebounded significantly in June and July by a total $45.92 billion, helped by the country's accelerated recovery in production and by foreign investors' increased confidence in the Chinese economy, said Meng.

A total of 84 Chinese companies had issued 125 medium and long-term bonds in the last two months. Among these, the issuance by industrial enterprises and financial institutions saw an increase of 30% and 25% y/y, respectively, while that of real estate developers fell 24%, according to Meng.

The continuous quantitative easing by major economies and the increased risk aversion of foreign investors had also helped boost the issuance, said Meng, noting that many Chinese companies had also delayed their issuance plans till the epidemic eases.

In the first half of the year, 164 Chinese enterprises issued 264 medium and long-term bonds overseas, totaling $103.31 billion. These bond issuers covered 41 sectors, with issuance by information technology companies increasing by 10.9% y/y, that of industrial companies rising by 24%, and energy companies jumping by more than 200%.

Issuance by financial institutions, real estate developers and local government financing vehicles saw year-on-year declines, according to Meng.