Chinese Business Owners Increasingly Confident About the Economy

(Beijing) — Chinese entrepreneurs’ confidence in the domestic economy edged up in the first quarter on a strong start of Chinese economy in 2017, according to a quarterly survey by China’s central bank.

In a survey of more than 5,000 industrial businesses in the country, 61.5% reported being upbeat about economic conditions, up from 54.2% in the October-to-December period and 43.7 % in the same period of last year.

The latest Entrepreneur Confidence Index (ECI), reflecting corporate confidence in the country’s overall economy in the current and the next three-month period, also marked the highest reading since the fourth quarter in 2014, when it stood at 61%.

The improving sentiment was echoed by Chinese bankers in a separate People’s Bank of China poll of about 3,000 bank heads. That survey, an index gauging bankers’ confidence in the Chinese economy, hit 64.9% in the first quarter of this year, the strongest since a reading of 67.6% in the first three months of 2014.

The Chinese economy had a strong start to 2017. The latest activity data released by the government suggested better-than-expected growth in investment and industrial output, which included solid thermal power generation increase in the January and February period that could point to a pickup in heavy industry on rising demand.

Activity in the manufacturing sector has continued to expand, with both the Caixin China General Manufacturing Purchasing Managers’ Index (PMI) and the official PMI increasing in February from January and factories reporting an increase in new orders.

Economic growth accelerated to 6.8% in the last quarter of 2016 from 6.7% in the preceding nine months. The central government has set a target for gross domestic product to expand about 6.5% or higher this year.

Contact reporter Pan Che (chepan@caixin.com)