This is interesting- borrowing to add to reserves?

The debt has to be at higher interest rates than what they earn on reserves.

China’s foreign debt grows 14.4% in 2009: SAFE

(Xinhua) China’s outstanding external debt reached $428.6 billion by the end of 2009, up 14.4 percent from a year earlier, the State Administration of Foreign Exchange (SAFE) said. The figure excluded Hong Kong Special Administrative Region (SAR), Macao SAR, and Taiwan. The country’s registered foreign debt was equivalent to $266.95 billion by the end of last year, up 2.5 percent from the 2008 level. Outstanding trade credits stood at $161.7 billion, according to the SAFE. China’s foreign debt service ratio was 2.87 percent, while the foreign debt ratio and liability ratio stood at 32.15 percent and 8.73 percent, respectively, the SAFE said. Mid- and long-term external debt, accounting for 39.52 percent of all outstanding foreign debt, totaled $169.39 billion by 2009. Short-term external debt rose 23 percent to $259.26 billion year-on-year by the end of 2009, accounting for 60.48 percent of the total.