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April 4, 2019

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Rich remain optimistic despite slower economy

China’s wealthy families remain optimistic about the country’s economy despite the slowdown in growth, and confident the government’s policies on public finance, foreign exchange and employment will pay off, a new survey shows.

The Bank of Communications’ bimonthly Climate Index of China’s Wealth released yesterday came in flat from two months earlier at 138 points.

A reading above 100 means China’s wealthy families show more optimism.

One below 100 indicates a deterioration in sentiment.

The world’s second-largest economy is one of the fastest growing in the world, but the growth is expected to slow to around 6.3 percent in 2019 from 6.6 percent in 2018.

The economy is facing more downward pressure this year with slowing consumption growth and a lack of momentum for further effective investment.

The authorities are implementing a series of macro policies — from fiscal to monetary and employment — to help create the right conditions for steady economic growth, BoCom said.

The economic climate sub-index fell 2 points to 137.

The sub-index for investment intention also dipped 1 point to 123, while that for income growth edged up 1 point to 154.

The government has elevated its employment-first policy to the status of a macro policy for the first time to increase society-wide attention on boosting employment.

With supportive policies, BoCom expects sustained improvement in employment.

The rise in the sub-index for income growth was led by higher income from investments. During the research from March 4 to 19, the Shanghai Composite Index rose strongly.

Also, the value of the dollar plunged amid weak economic data in the United States, leading to a two-week rise in gold prices. International oil prices continued to soar as well to the highest level since November 2018.

The investment intention sub-index also dipped due to lower investment intentions for real estate, in spite of the rising intention to invest in other assets including stocks and funds.

Beijng, Shanghai and Shenzhen posted rises of 1 to 2 points in the Climate Index.


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