BEIJING, May 21 (Xinhua) -- China’s top economic planner, National Development and Reform Commission (NDRC), and the Ministry of Finance have recently jointly released a document to prevent foreign debt risks of the domestic enterprises, according to the report by the Xinhua-run Economic Information Daily.
Under the document, enterprise (including the financial institution) with a plan of medium and long-term foreign borrowings has to carry out market-oriented financing in compliance with laws and regulations, fully demonstrate the necessity, feasibility, economics, and financial sustainability of issuing foreign debts, and formulate a foreign debt principal and interest repayment plan.
Meanwhile, the enterprise has to establish a sound and standardized corporate governance structure, management decision-making mechanism and financial management system.
In addition, as for the investment project supported by the foreign borrowings, a market-based investment return mechanism is required be established to form a sustained, reasonable and feasible financial expected income. (Edited by Hu Pingchao, hupingchao@xinhua.org)
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