SHANGHAI :
Avert Overseas Debt Risks, Manage Realty Firms' Foreign Loans, NDRC Stresses
Tang Shihua
DATE:  Jun 29 2018
/ SOURCE:  Yicai
Avert Overseas Debt Risks, Manage Realty Firms' Foreign Loans, NDRC Stresses Avert Overseas Debt Risks, Manage Realty Firms' Foreign Loans, NDRC Stresses

(Yicai Global) June 29 -- The National Development and Reform Commission recently reiterated the need to properly control the amount of foreign debt, optimize its structure and avert risks, while managing real estate concerns' overseas funding. 

An NDRC official explained a notice NDRC issued in May on curbing such loan risks, Shanghai Securities News reported.

Regulating the qualifications of companies using funds raised via debt financing is necessary, as is underlining warnings of associated risks, introducing sanctions for violations, and perfecting the market's policing mechanism, the staffer said. 

Chinese firms amassed USD236 billion in debts abroad last year, NDRC data show. This figure reached USD99.2 billion in the first five months of this year for the same rate of annual growth. The foreign debt of realty companies and local government financing centers rose over the past two years, however, and this is a red light, the official cautioned.

The solvency of some firms with poor credit warrants attention, he added.

Regulators must coordinate their foreign debt management, the official advised.

The government will draw up measures to register and manage companies' foreign loans and list criteria for foreign funding, while improving the application and handling procedures for recording and registration, he said.

The new standards will also help gather and supervise foreign debt information and deal with violations, he noted.

Editor: Ben Armour

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Keywords:   Government Policy,Financial Risk,Oversea Financing,REAL ESTATE,Local Government Investment Platform