China's external debt highest since 1985

China's outstanding external debt in 2011 totaled more than $751 billion by the end of March, the highest since 1985, according to data released by the State Administration of Foreign Exchange on Tuesday.

The proportion of short-term debt also rose to a record high.

The total debt went up by 8.1 percent from the $695 billion three months earlier.

Outstanding medium and long-term debt stood at $193.6 billion, accounting for 26 percent of the total debt, while the short-term debt of $557.7 billion took up 74 percent, up by 2 percentage points compared with the end of 2011.

"Among the short-term debt, trade credit between enterprises and trade finance from banks together accounted for 75.11 percent, indicating that the surge in short-term debt is closely related to the rapid development of China's foreign trade in recent years," SAFE said in a statement.

In the first three months, China borrowed $9.3 billion in medium- and long-term external debt, down by 34.3 percent year-on-year.

"Dollar-denominated debt took up 77 percent of China's registered external debt, followed by euro debt, which made up 8.23 percent, less than 1 percentage point higher than three months earlier. Yen debt accounted for 7 percent," SAFE said.

China's external debt rose by $146 billion last year, or nearly 27 percent, adding to concerns over whether rising external debt might undermine China's fiscal position and cause economic damage.

Experts warned that regulators must watch fast-growing short-term liabilities.

The proportion of short-term external debt to the total also climbed to a record high of 72 percent as of Dec 31, in contrast to 68 percent in 2010 and 60 percent in 2009.

"Regulators should be alert to China's rapidly rising short-term external debt, as the proportion of 72 percent is well above the international alert level of 25 percent," said Li Chao, deputy head of SAFE, in December.

However, "the ratio of short-term debt to foreign exchange reserves stood at 15.75 percent, far below the globally recognized warning line of 100 percent," SAFE said earlier in March.

As of 2011, China's other external debt indicators all fell into the “safety” range, according to international standards, it said.

wangxiaotian@chinadaily.com.cn