Circular of the National Development and Reform Commission and the Ministry of Finance on Improving the Market Restraint Mechanism and Taking Strict Precautions Against Foreign Debt Risks and Local Debt Risks

Chinese version

Circular of the National Development and Reform Commission and the Ministry of Finance on Improving the Market Restraint Mechanism and Taking Strict Precautions Against Foreign Debt Risks and Local Debt Risks

Fa Gai Wai Zi [2018] No.706

May 11, 2018

The development and reform commissions and finance departments (bureaus) of all provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan and Xinjiang Production and Construction Corps,

For the purpose of thoroughly implementing the spirits of the 19th National Congress of the Communist Party of China, the Central Economic Work Conference and the National Finance Work Conference, further giving full play to the positive role of the low-cost capital of the international capital market in supporting the transformation and upgrading of the real economy and promoting the supply-side structural reform, and improving the market restraint mechanism and practically and effectively taking precautions against medium and long-term foreign debt risks and local debt risks, the relevant matters are hereby notified as follows.

I. Enterprises (including financial institutions, the same below) intending to borrow medium and long-term foreign debts shall have concrete business in fact, raise funds in a market-oriented way in accordance with laws and regulations, fully demonstrate the necessity, feasibility, economy and financial sustainability of issuing foreign debts, and meanwhile, work out a plan for the repayment of the principal and interest of foreign debts according to their respective credit status, and implement safeguards for the repayment of debts.
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