The State Administration of Foreign Exchange (SAFE) recently released data on China's external debt at the end of 2022. The SAFE Deputy Administrator and Press Spokesperson Wang Chunying answered media questions on relevant issues.

Q: Could you brief us on China's external debt in the fourth quarter of 2022?

A: In the fourth quarter of 2022, the scale of China's external debt dropped slightly, and its structure remained basically stable. By the end of 2022, the full-scale outstanding external debt (including domestic and foreign currencies) reached USD 2.4528 trillion, representing a decline of USD 28.7 billion or 1.2% from the end of September 2022. With respect to currency composition, the external debt in domestic currency accounted for 45%, up by 1% from the end of September 2022. Regarding maturity structure, the medium- and long-term external debt accounted for 45%, unchanged from the level recorded at the end of September 2022.

Q: What would you say about China's external debt situation?

A: The overall scale of China's external debt has remained relatively stable. Since the beginning of 2022, due to factors such as the Fed's interest rate hike, high global inflation, and the epidemic, China's external debt has dropped. By the end of 2022, the full-scale outstanding external debt declined by USD 293.8 billion or 10.7% from the end of 2021. Specifically, the exchange rate translation factor contributed to USD 104.6 billion, or 36% in the decline of outstanding external debt. With the shift of China's COVID-19 prevention and control measures more steadily and appropriately, the recovery of China's economy picked up, and the decline in China's external debt in the fourth quarter narrowed sharply in comparison with the second and third quarter of 2022.

China's external debt risks were under control on the whole. By the end of 2022, the liability ratio (or ratio of outstanding external debt to GDP) was 13.6%. The debt ratio (or the ratio of outstanding external debt to export revenue from trade) was 66%. The debt servicing ratio (or ratio of principal payments and interest on external debt to the export revenue from trade) was 10.5%. The ratio of short-term external debt to foreign exchange reserves was 42.8%. These indicators were within internationally recognized thresholds (20%, 100%, 20%, and 100%, respectively), indicating that China's external debt risks were under control.

The overall scale of China's external debt is expected to remain stable. Looking into 2023, China maintains strong resilience, great potential, and full of vitality in the economy with sound long-term economic fundamentals unchanged. With a full recovery of China's economy on the way, the basis for maintaining the overall stability on the scale of China's external debt will remain solid. The SAFE will keep promoting cross-border investment and funding facilitation in the upcoming phase to support high-quality growth in the real economy.