(Reuters)
Updated: 2007-07-30 15:13

China's foreign debt rose $8.57 billion, or 2.65 percent, in the first quarter to $331.562 billion, the State Administration of Foreign Exchange said on Monday.

In a statement on its Web site (www.safe.gov.cn), the foreign exchange regulator said short-term foreign debt rose $7.0 billion, or 3.8 percent, from the end of 2006 to reach $190.6 billion at the end of March.

Medium- and long-term foreign debt rose by $1.6 billion, or 1.13 percent, to $140.9 billion.

Related readings:  Foreign debt up 14.9% in 2006  Foreign debt rises but at slower pace  Nation may issue tighter rules on short-term foreign debt

The pace of accumulation of short-term debt, which economists look to as an indicator of inflows of capital speculating on an appreciation in the yuan, was much slower than in the fourth quarter of 2006, when it increased $15.0 billion.

That followed rises of $2.3 billion in the third quarter of 2006, $5.3 billion in the second and $4.9 billion in the first, official figures show.

Short-term debt accounted for 57.50 percent of total foreign debt at the end of March, the administration said, up from 56.85 percent at the end of December.

China's overall foreign debt accounted for just 27.6 percent of its foreign exchange reserves stockpile at the end of March of $1.2 trillion. The reserves subsequently grew to $1.33 trillion at the end of June.

The foreign exchange regulator has been stepping up its checks of inflows of short-term speculative capital.

Last month, it punished 19 Chinese banks and 10 foreign banks for irregularities leading to illegal capital inflows into its stock and property markets.

In March, it ordered Chinese banks to reduce their short-term foreign debt to 30 percent of their 2006 quota by the end of March 2008, while foreign banks and non-bank financial institutions must make a cut of 60 percent.

Foreign debt, in billions of dollars:

        End-Mar07   End-2006  End-Sep06  End-Jun06  End-Mar06
 Total         331.6      323.0      305.0      297.9      287.9
 Short-term    190.6      183.6      168.6      166.3      161.0
 Mid-long term 140.9      139.4      136.4      131.7      126.9