China reduces short-term foreign debt quotas

China will reduce firms' short-term foreign debt quotas in order to control risks from cross-border capital flows, the foreign exchange regulator said on Wednesday. The State Administration of Foreign Exchange said the lower ceiling would go into effect on April 1. Short-term foreign debt is seen in part as a bet on yuan appreciation, and China has in the past reduced the amount of debt that firms are allowed to incur when concerned about inflows.