BIZCHINA / Center
China to get more int'l loans
(Xinhua)
Updated: 2007-04-07 14:31
Despite its huge forex reserves, China will continue to borrow "a
moderate amount" of money from international finance corporations every
year, said an official with the National Development and Reform
Commission (NDRC).
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China will use international commercial loans in a rational and prudent
way, NDRC vice chairman Zhang Xiaoqiang said.
A report released by the NDRC and the Asian Development Bank said China
will need loans of three billion U.S. dollars every year in the coming
decade.
The report proposed that eighty percent of the money be used to support
the development of the central and western areas as well as the old
industrial bases in the northeastern areas.
Zhang said the country will improve the quality and efficiency of using
the loans.
Analysts say the country can use the loans not only to balance regional
development but also to reduce excessive fluidity through the financial
leverage.
Cheng Siwei, vice chairman of the Standing Committee of the National
People's Congress, said last week that China needs to retain around 650
billion U.S. dollars of forex reserves.
Cheng said 450 billion dollars should be earmarked as strategic reserves
and a further 200 billion should be held to provide security for Chinese
enterprises investing overseas and for individuals, because the Chinese
currency is not freely convertible.
To ensure continued growth in the value of the nation's foreign
exchanges, the country plans to establish a state foreign exchange
investment company which may invest about 200 billion dollars of China's
foreign exchange reserves.
China's foreign exchange reserves, which reached 1.066 trillion U.S.
dollars at the end of 2006, have grown by more than 200 billion dollars
annually in recent years.
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