Financial risk arising from China's foreign debt is "overall controllable," and all major indicators of the country's foreign debt are within international safety standards, according to a statement on the website of the State Administration of Foreign Exchange (SAFE) on Thursday.
As of the end of December, China's outstanding foreign debt surged $294.8 billion to $1.71 trillion, the statement noted.
That translates to a debt ratio, or the percentage of outstanding foreign debt to GDP, of 14 percent, and the ratio of short-term foreign debt to foreign exchange reserves is 35 percent. All indicators show that "the country's financial risk is controllable overall," the statement said, citing a spokesperson whose name was not given.
The spokesperson attributed the rise in foreign debt in 2017 to a stable and sound economy, as well as a domestic policy boom.
In 2017, China's economy grew 6.9 percent year-on-year to 82.7 trillion yuan ($13.2 trillion), while trade volume soared 14.2 percent to 27.8 trillion yuan. And the yuan's exchange rate "has also shown more two-way fluctuations while remaining basically stable over the last year," the spokesperson noted.
Meanwhile, the People's Bank of China, the country's central bank, and SAFE released a series of new rules to encourage domestic financial institutions and companies to raise funds in overseas markets in both yuan and foreign currencies, which in turn boosted the volume of foreign debt, according to the spokesperson.
In the fourth quarter of 2017, China's current account surplus reached 411.6 billion yuan, and its finance and capital account surplus was 25.8 billion yuan, SAFE said in a separate report on Thursday.
China is ranked top in terms of international reserve assets globally, SAFE said.
With the global economic recovery, as well as China's economy gearing up, SAFE expects more balanced international payments and stable cross-border capital flows.
