Business confidence sees signs flashing go, go, go

Several business confidence surveys have shown that China's is regaining traction among entrepreneurs despite slower GDP growth.

Based on a survey of about 5,000 industrial businessmen nationwide, the People's Bank of China set the entrepreneur index at 54.2 percent in December, the third consecutive quarterly growth figure.

China's factory output and retail sales grew faster than expected by the end of 2016 as a strong housing market and a government infrastructure spending spree underpinned growth in the world's second-largest economy.

Executives of China's largest corporations ended 2016 on an upbeat note with overall confidence rising to the highest level since August 2014 in December, according to the MNI China Business Sentiment Index.

The pickup in sentiment suggests companies remain cautiously optimistic going into 2017.

The survey polls Chinese business executives at a mix of manufacturing and service sector companies listed on both the Shanghai and Shenzhen stock exchanges.

Since the start of 2016's fourth quarter, output and demand have been trending upward, driving the increase in positive sentiment among executives. Production rose further in December by 0.9 points to 58.9 - the highest level since September 2015.

"Broadly consistent with more upbeat official data on the real economy, our survey points to sustained growth momentum going into 2017. Business conditions improved soundly during December, with output continuing to gain pace and new orders holding up fairly well," says Andy Wu, senior economist of MNI Indicators.

Similarly, the business confidence index has been rising for four months in a monthly survey by the Cheung Kong Graduate School of Business, suggesting optimism is sprouting among business operators across China for prospects over the next six months.

The CKGSB index comprises four subindexes for corporate sales, profits, financing environment and inventory levels. The latest survey showed expansion in the first three categories. Inventory remains a critical issue notably for small and medium-sized enterprises.

According to a joint survey of 50 economic experts by the Centre for European Economic Research and Fudan University, a growth rate of 6.5 percent is predicted for China's economy in 2017. This would constitute a decline of 0.2 points from the recently published official growth figures last year.

The experts surveyed did not seem to see any greater danger to the Chinese economy. For example, no dangers are foreseen from a possible decline in exports. The majority of experts continue to predict an increase in exports over the next six months, and even a greater share of world trade for China.

Buoyed by healthy domestic consumption, imports are also expected to continue to increase, says Sun Lijian, professor of economics at Fudan University.

hewei@chinadaily.com.cn

(China Daily European Weekly 02/17/2017 page27)