China's Foreign Exchange Reserves

Doug Henwood dhenwood at panix.com
Wed May 29 17:39:00 MDT 1996


China's foreign debt was brought up here. In 1994, according to the 1995-6
World Debt Tables from the World Bank, China's total debt was $100.6
billion. That may sound like a lot, but it was a mere 19.3% of GDP; debt
service was 8.9% of exports. Latin America's numbers were 254.2% and 30.3%
respectively. The "severely indebted low income countries" (SILICs) were
487.9% and 21%. China's exports have grown over 50% since 1994, so its debt
appears quite manageable. Should growth stumble badly, then everything
would change, of course.

High reserves can also be the result of borrowings, as well as a strong
external position. Mexico appeared to have lots of reserves in early 1994,
but these were in large part the result of borrowing. China published
balance of payments numbers stop in 1994, at least in IFS, so it's
impossible to tell where the reserves are coming from. One imagines from a
trade surplus - looks like their trade balance was $20 billion in the black
in 1995 - and foreign investment inflows.

Doug

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