China's efforts to curb the inflow of speculative funds began to show effect as the country's total short-term external debts growth continued to slow in September, said the foreign exchange authorities.

Short-term external debts is an indicator of cross-border capital flow, its sharp rise usually means increased financial risks.

Figures from the State Administration of Foreign Exchange(SAFE) show the balance of combined foreign debts ending September totaled 304.97 billion U.S.dollars, an increase of 23.93 billion U.S.dollars over the same period last year.

Short-term external debts balance stood at 168.58 billion U.S.dollars, up 12.44 billion U.S.dollars from the end of last year, accounting for 55.28 percent of the total outstanding external debts, lower than the 55.81 percent at the end of June.

Trade credit, which is the main cause of rising short-term debt, increased 100 million U.S.dollars per month in the third quarter, much lower than the one billion U.S.dollars monthly growth in the first half of this year.

China's short-term external debt has rocketed in the past five years, accounting for 55.94 percent of the combined debts in March this year.

Foreign trade enterprises with bad records in foreign exchange settlement have been put under closer watch by the SAFE, Which has helped prevent inflow of speculative capital.

According to the SAFE, the ratio of short-term foreign debts to foreign exchange reserves dropped for the first time at the end of June, reaching 5.85:1 by the end of September, well above the 1:1 international safe standard.

Source: Xinhua