However, this doesn’t mean that developing countries necessarily hold net external debt when they borrow foreign capital. According to the estimates of Lane and Milesi-Ferretti (2001a), many developing countries hold remarkable external credits. Dollar and Kraay (2005), for example, found that China had been a net external creditor since 2003, while it had experienced very high economic growth rates and absorbed much foreign direct investment (FDI, hereafter) in the past three decades