As of the end of June 2012, China ’s outstanding external debt (excluding that of Hong Kong SAR, Macao SAR, and Taiwan Province ) reached USD785.172 billion. Specifically, the outstanding registered external debt reached USD495.072 billion and the balance of trade credit between enterprises totaled USD290.1 billion.

With respect to the term structure, outstanding long- and medium-term external debt (with the remaining term) was USD196.95 billion and outstanding short-term external debt (with the remaining term) was USD588.222 billion. Specifically, trade credit between enterprises and bank trade financing respectively accounted for 49.32 percent and 24.57 percent of the total. The two accounted for 73.89 percent of the outstanding short-term external debt (with the remaining term).

In terms of the type of debtor, the outstanding debt of Chinese-funded financial institutions was USD253.215 billion, accounting for 51.15 percent of the outstanding registered external debt; the outstanding debt of foreign-funded enterprises was USD141.54 billion, accounting for 28.59 percent; and the outstanding debt of foreign-funded financial institutions was USD57.284 billion, accounting for 11.57 percent. In terms of the types of debt, the balance of international commercial loans amounted to USD428.575 billion and the balance of foreign government loans and loans granted by international financial organizations amounted to USD66.497 billion. In terms of the currency structure, USD debt accounted for 77.77 percent, Euro debt 7.51 percent, and JPY debt 6.99 percent of the outstanding registered external debt.

In terms of the sectors in which the debt is invested, with reference to the Industrial Classification of the National Economy, the outstanding medium- and long-term registered external debt (based on contract terms) invested in the manufacturing sector accounted for 23.67 percent, the transportation, storage, and postal sector 13.31 percent, and the electric power, coal, gas, and water production and supply sector 6.90 percent.

In the first half of 2012, China newly borrowed USD21.255 billion in medium- and long-term external debt, repaid USD14.779 billion in principal of long- and medium-term external debt, and paid USD1.198 billion in interest. The net inflows under the outstanding long- and medium-term external debt were USD5.278 billion, down 25.24 percent on a year-on-year basis.

Addendum: Definition of terms and interpretations

Classification of the term structure of external debt. There are two classification methods for the classification of external debt in terms of the term structure. First, classification on the basis of the contract term, i.e., it is classified as medium- and long-term external debt in cases where the contract term is more than one year, and it is classified as short-term external debt in cases where the contract term is one year or less; second, classification on the basis of the remaining term, i.e., on the basis of the above classification method, medium- and long-term external debt due within one year will be classified as short-term external debt. In order to differentiate between the two classification methods, in this news release any indication of the classification method, i.e., the contract term or remaining term, follows the definitions of the medium- and long-term external debt and the short-term external debt.

Trade credit between enterprises refers to the external liability arising from directly extending credit between the seller and buyer of goods, specifically transactions between residents in Mainland China and foreign non-residents (including non-residents in Hong Kong SAR, Macao SAR, and Taiwan Province), i.e., the debt incurred due to the difference between the time of payment and that of the transfer of ownership of the goods. Trade credit between enterprises includes credit directly provided by the supplier (e.g., the overseas exporter) for commodity transactions and services, and advance payments made by buyers (e.g., overseas importers) for goods, services, and on-going business (or business to be undertaken).

Bank trade financing refers to loans related to trade extended by a third party (e.g., banks) to exporters or importers, for instance, loans extended by foreign financial institutions or export credit agencies to buyers.

Trade-related credit is a broad concept. In addition to trade credit between enterprises, it also includes other kinds of credit provided for trade activities. According to the definition, trade-related credit includes trade credit between enterprises, bank trade financing, short-term notes related to trade, and so forth.