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China’s Companies Have Unseen Foreign Debt That’s Maturing Fast

  • Firms have $650 billion FX debt with payment wave nearing
  • Need to service these liabilities challenged by weaker yuan
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Photographer: Brent Lewin/Bloomberg
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The foreign debt built up by Chinese companies is about a third bigger than official data show, adding to the pressure on the country’s currency reserves as a wave of repayment obligations approaches in 2020.

On top of the $2 trillion in liabilities to foreigners captured in official data, mainland Chinese firms have around another $650 billion in debts built up by subsidiaries overseas, according to Bloomberg calculations. About 70% of that debt is guaranteed by entities such as onshore parent companies and their subsidiaries, the data show. The amount of maturing debt will rise in coming quarters, with $63 billion due in the first half of 2020 alone.