China still needs to concentrate on debt problems. Illustration: iStock

The National Development and Reform Commission said on Wednesday they will properly control the scale of foreign debt issued by domestic enterprises, so as to effectively prevent risks, Economic Information Daily reported.

In the past two years, the scale of foreign debt issuance has increased in some enterprises, especially among real estate developers and operators of local government financing platforms.

Some enterprises with low operating income and profits have registered relatively large amounts of foreign debt, ranging from US$500 million to billions of dollars, which is incompatible with the financial strength of a company.

In addition, some issuers lack the ability to repay lenders with reliable income streams. Some also have no source of foreign exchange income, and thus have limited capacity to resist the high risks triggered by exchange rate fluctuations.

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