The Risk Management Of China’s Foreign Debt

Reform and opening up has a huge impact on China’s economic development. It makes our country’s economic power and comprehensive national strength steadily improved. Among of that, foreign debt is an effective approach to making up for the shortage of fund, making the international payments balance and promoting economic development. As a result of that, the scale of foreign debt is increasing rapidly in our country. But, the increasing scale of debt and the problems of debt structure bring some threats to our financial safety. Until the end of2012, the short debts take up about73.4%in total, which exceed the international usual risk warning line greatly. Also, the European debt crisis starting from Greece has made a huge influence to the development of the world economy. So many experts and scholars from various countries paid much attention on china’s risk level of foreign debt. To make full use of the positive influence of foreign debt and reduce the negative effect of foreign debt, it is necessary for us to deepen the study of foreign debt, strengthen the foreign debt management, make reasonable arrangement for foreign debt structure and effectively prevent and control debt risk.The paper analyzes the scale risk and structure risk of foreign debt starting from the basic concepts of foreign debt. Then, according to the existing research results and the construction principle of foreign debt risk evaluation index system, the paper construct the risk evaluation index system from the scale risk, structure risk, and the dynamic risk and research the internal structure of the index system. Factor analysis is applied to weighting the assessment indices. At last, the paper calculates the risk lever of China’s foreign debt. The results indicate that our overall risk lever is relatively low. The foreign debt risk in China controls in the area. Look from microcosmic level, the debt scale is appropriate and sustainable. But, the supervisory department must pay more attention on the structure risk and the dynamic risk of our foreign debt which have a higher risk lever.