1. Clarify the purpose of borrowing foreign debt and improve the efficiency of using foreign debt
1. Economic development lacks sufficient Chinese savings. It is necessary to introduce foreign funds to supplement China's savings;
2. In the case of continued trade deficit, net capital inflows should be used to make up for the foreign exchange gap and maintain the balance of international payments;
3. Introduce advanced foreign technology and equipment to improve product quality, thereby achieving the purpose of improving international competitiveness.
2. my country’s main countermeasures to strengthen foreign debt management
1. Under the guidance of national industrial policies, Invest foreign debt in sectors with better economic returns.
Maintain a reasonable proportion of basic industries and export-based foreign exchange-earning sectors in foreign debt investment to improve China's foreign debt repayment ability. Depending on the source and nature of foreign debt, it will be invested in different departments. Official loans have low interest rates and long terms, but there are strict regulations on their use, and they are often required to be invested in non-profit projects. Borrowing international commercial loans should focus on projects with short construction cycles and the ability to earn foreign exchange through exports.
2. In order to make good use of foreign loans, we must also ensure the implementation of supporting facilities in China.
For projects that have been signed, we must promptly implement supporting funds, equipment, raw materials and other basic construction conditions; for new applications for foreign loans, we must strictly review whether they have supporting facilities. Ability; projects that do not have supporting capabilities shall not be contracted to external parties.
3. Establish efficiency indicators for the use of foreign debt.
It is suggested that the project exchange rate/foreign debt interest rate can be used to measure the external debt utilization efficiency of the export sector; the project profit rate/foreign debt interest rate can be used to measure the external debt utilization efficiency of the non-export sector. When these two indicators are greater than 1, it indicates that the project's use of foreign debt is effective.
The above is the editor of Legal Savior Network summarizing for you my country’s countermeasures to strengthen foreign debt management. I hope it can be helpful to everyone.
