BEIJING: China's foreign debt rose to $697.2 billion at the end of September from the $642.5 billion three months earlier, China's State Administration of Foreign Exchange (SAFE) said on Tuesday.
Short-term foreign debt -- a gauge of hot money inflow -- was valued at $507.6 billion at the end of September 2011, up from $462 billion at the end of June, SAFE said.
SAFE said a sharp rise in trade-related credit -- including loans provided by overseas sellers to domestic buyers as well as payment in advance made by overseas importers -- contributed to the increase, rather than speculative capital flows.
"The rise of foreign debt won't affect China's debt security," SAFE said.
Few doubt that China, which sits on the world's biggest pile of foreign exchange reserves worth $3.2 trillion, would fail to honour its foreign obligations. Beijing typically regards a swift accumulation of short-term debt as unwelcome.
Li Chao, a deputy director of SAFE, said earlier this month that the percentage of foreign debt with a maturity shorter than a year was 72 percent at the end of September and way too high.
Li said money inflows into China betting on a stronger yuan had contributed to the sharp rise of short-term foreign debts.
However investors in the offshore yuan market have reversed course recently and monthly foreign exchange data from the central bank showed that dollars left China in October and November.
Broken down by currency, dollar-denominated debts accounted for 75.8 percent of the total at the end of September, down from 78 percent at the end of June, SAFE said.
Yen debts accounted for 8.11 percent of total at the end of September, and euros for 7.21 percent, SAFE added.
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