China end-1999 debt 2.4 trln yuan, 30 pct of GDP

SHANGHAI (AFX-ASIA) - China's total domestic and overseas debt at end-1999 amounted to 2.4 trln yuan, or 30 pct of the country's 1999 gross domestic product, National Bureau of Statistics vice-director He Kan said, according to the China Economic Times. According to the report, which became available here today, He said the country's obvious foreign debts, which amounted to 151.8 bln usd at end-1999, have typically risen by 10-12 bln usd a year. The country's hidden foreign debts have also grown, and amounted to 50 bln usd at end-1999. Hence, the country's foreign debt at end-1999 amounted to about 200 bln usd, or 1.6 trln yuan. When the domestic treasury bond issuance is included, domestic and foreign debts amounted to 2.4 trln yuan at end-1999. On top of this, the debts in the country's social security system are large, he said, adding that calculations by the state system reform departments and insurance institions indicate that the government needs to pay a total of 3.7 trln yuan in subsidies to facilitate the payment of pension fund debts. The government also needs to pay 108 bln yuan annually to fund payments to the unemployed. He added that financial institions' unhealthy assets continue to grow as a result of loans to state enterprises. At end-1999, public departments' total debts amounted to 732.4 bln yuan, or 64.4 pct of that year's fiscal income and 8.9 pct of GDP in that year. This means public departments' debts doubled between 1995 and 1999, he said. He said the government's active fiscal policy may have mitigated a slowdown in economic growth and offset deflation, but it has increased financial risks. He proposed action to limit the scale of domestic and overseas debt, and to strengthen supervision of the country's deficit.

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