Business climate better, sentiment worse
By Wang Yanlin |
July 9, 2011, Saturday
|
Print Edition
Print Edition
CHINA'S business climate improved in the second quarter from the previous three months, but business confidence dropped, the National Bureau of Statistics said yesterday.
The Business Climate Index, which measures the macroeconomic environment together with companies' performance, edged up 1.8 points from the first quarter to 135.6 in the April-June period.
In contrast, the Business Confidence Index, a gauge of sentiment among producers, lost 5 points to 132.4. A reading above 100 signals expansion or optimism, while the opposite points to contraction or pessimism.
"The tightening monetary policy stance has been costing confidence among businesses," said Li Maoyu, an analyst at Changjiang Securities Co. "But in the second quarter, China did not launch as many aggressive measures as expected in concern about slower economic growth. That's why the overall business climate was considered improved."
China announced the latest interest rate increase on Wednesday, and economists called the rise "a move coming late" as China raised interest rates only once in the second quarter, on April 5.
Policymakers have maintained a tight stance against inflation but they are reluctant to adopt aggressive measures such as interest rate increases, fearing more inflows of speculative money, as some other major markets allow the lending rate to remain near zero.
The Chinese central bank has relied more on raising reserve requirement ratios to siphon capital out of the market.
China's Consumer Price Index, the main yardstick of inflation, climbed 5.5 percent from a year earlier in May, a 34-month high. Some expect the June figure may surpass 6 percent.
The Business Climate Index, which measures the macroeconomic environment together with companies' performance, edged up 1.8 points from the first quarter to 135.6 in the April-June period.
In contrast, the Business Confidence Index, a gauge of sentiment among producers, lost 5 points to 132.4. A reading above 100 signals expansion or optimism, while the opposite points to contraction or pessimism.
"The tightening monetary policy stance has been costing confidence among businesses," said Li Maoyu, an analyst at Changjiang Securities Co. "But in the second quarter, China did not launch as many aggressive measures as expected in concern about slower economic growth. That's why the overall business climate was considered improved."
China announced the latest interest rate increase on Wednesday, and economists called the rise "a move coming late" as China raised interest rates only once in the second quarter, on April 5.
Policymakers have maintained a tight stance against inflation but they are reluctant to adopt aggressive measures such as interest rate increases, fearing more inflows of speculative money, as some other major markets allow the lending rate to remain near zero.
The Chinese central bank has relied more on raising reserve requirement ratios to siphon capital out of the market.
China's Consumer Price Index, the main yardstick of inflation, climbed 5.5 percent from a year earlier in May, a 34-month high. Some expect the June figure may surpass 6 percent.
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