Officials from the People's Bank of China and the State Administration of Foreign Exchange answered questions from reporters regarding the "Notice on Issuing the Measures for the Administration of Overseas Loans by Domestic Enterprises".

Question: What is the limit on foreign loans and how is the balance of foreign loans determined? The limit on the balance of foreign loans for domestic enterprises is linked to their owner's equity. The limit on the balance of foreign loans = the owner's equity of the lender in the most recent audited period x the macro prudential adjustment coefficient. The balance of foreign loans = the sum of the lender's foreign currency foreign loans + the sum of the lender's foreign currency foreign loans x the currency conversion factor, with the currency conversion factor set at 0.5. To better meet the needs of "going global" enterprises for cross-border operating funds, the macro prudential adjustment coefficient has been raised from the previous 0.5 to 0.6. To effectively manage the business operations of foreign loans, domestic enterprises and banks engaging in foreign loan operations should timely and accurately report international balance of payments statistics and submit data on related accounts, foreign exchange transactions, and the RMB cross-border receipt and payment information management system in accordance with relevant regulations.