The State Administration of Foreign Exchange (SAFE) has recently disseminated China's external debt data as at the end of June 2019. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on China’s recent external debt situations.

Q: Could you brief us on China's external debt data for the second quarter of 2019?

A: In the second quarter of 2019, China posted slight growth in external debt. As at the end of June, China's full-scale outstanding external debt denominated in both domestic and foreign currencies amounted to USD 1.998 trillion, up by USD 26.3 billion or 1.3% from the end of March, mainly due to the growth in the balance of debt securities.

Overall, China's external debt structure has been optimized, strengthening the stability of external debt. Since RMB bonds issued within China were included in the Bloomberg Barclays Global Aggregate (BBGA) in April 2019, global investors have raised their recognition of China's bonds market and invested more in RMB bonds issued within China. In the second quarter, over 70% of China's full-scale external debt increments were driven by the purchases of domestic RMB bonds by non-residents, especially mid and long-term investors like central banks, facilitating continuous optimization of external debt structure. By the end of June, the ratio of mid and long-term external debt had risen by 3 percentage points quarter-on-quarter, and the ratio of external debt in RMB terms, 1 percentage point quarter-on-quarter. China's major external debt metrics were all within the internationally accepted security ranges, indicating the external debt risk is controllable on the whole.

In the year to date, China's economic performance has improved while staying stable, with the economic structure constantly optimized, showing the great resilience, potential and leeway for economic growth. The balance of payments has maintained overall equilibrium, revealing risks associated with external debt are controllable. Going forward, the SAFE will continue deepening the foreign exchange administration reform and advancing financial liberalization, while guarding against the risks arising from abnormal cross-border capital flows, to ensure China's economic and financial security.