International solvency has broad sense and narrow sense.
In the narrow sense, it generally refers to the international reserve assets directly controlled by the government, also known as the first-line reserve;
In a broad sense, it includes the short-term assets of a country’s commercial banks borrowed from abroad and the medium – and long-term foreign exchange assets owned by the country’s official or private (mainly refers to medium – and long-term foreign investment), also known as second-line reserves.
There are three main indicators that reflect the solvency of a country: 1. The country’s international reserves, which are international liquid assets that can be placed at the disposal of the government.
Including the country’s gold holdings, foreign exchange reserves, and net reserves in the fund;
2. Short-term foreign exchange assets of the country’s commercial banks and foreign exchange banks and privately owned short-term foreign exchange assets;
3. International lending capacity, that is, the amount of money a government may borrow in the international financial market.
