WHILE financial markets have expressed concerns over China's rapid corporate foreign debt build-up, which was estimated at US$1 trillion, or 9.3 per cent of GDP in 2015, many Chinese companies have started repaying their foreign borrowing since the second half of last year.
This is positive for China's systemic stability as it reduces its foreign debt burden, which is not heavy despite the market's concern.
However, foreign-debt repayment can have a negative implication for the yuan exchange rate, as Chinese companies have to sell yuan and buy foreign currencies to repay their foreign debt.
The yuan exchange rate is likely to remain under downward pressure, all things equal, for as long as Chinese...
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