China's foreign debt rose 3.8 percent in the second quarter to $266.2 billion, indicating continued speculation for a further appreciation in the yuan, data showed on Friday.
Short-term foreign debt - seen by analysts as an indicator of corporate speculation in the yuan - rose 7.9 percent between the end of March and the end of June to $141.3 billion.
The rise in short-term foreign debt contrasted with a fall in long-term foreign debt to $124.8 billion from $125.5 billion, figures on the Web site of the State Administration of Foreign Exchange (SAFE) showed (www.safe.gov.cn).
"The rise in China's short-term foreign debt reflected continued hot money inflows, showing speculation on a further rise in the yuan remains strong, despite the revaluation," said Xiao Minjie, economist at Daiwa Institute of Research in Shanghai.
China revalued the yuan by 2.1 percent against the dollar on July 21 in a move that also gave wider play to market forces in setting the exchange rate.
SAFE adjusted the foreign debt data series to reflect a change in the way it compiles the figures to include some trade-related borrowing, such as payables at Chinese importers and forward sales at exporters. China's end-March foreign debt was revised to $256.4 billion from $233.4 billion, while the end-2004 figure was revised to $247.5 billion from $228.6 billion, the data showed.
China is trying to curb unusual inflows of capital amid signs of persistent speculation on the yuan following July's landmark revaluation. The United States has called for more steps to loosen the yuan, but Chinese officials have made it clear that Beijing would tread carefully before allowing the yuan to climb much further.
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