Easing economy clouds mood
By Wang Yanlin |
October 30, 2010, Saturday
|
Print Edition
Print Edition
BUSINESS executives in China were less confident about their domestic business outlook in October as the economy moderated, an industry survey showed yesterday.
The China Business Sentiment Survey, compiled by Market News International, found that overall conditions for Chinese companies fell to 65.03 this month from 69.54 in September. But the October index was still above the readings of 62.16 in August and 64.94 in July.
"A drop in confidence is the result of higher input inflation, lower availability of credit and expectations of higher interest rates," the survey said.
China's economic growth has eased in recent quarters as the government stepped up moves to contain pollution and ease demand in a bid to reduce risks of overheating.
But some analysts also viewed the moderation as the beginning of a cycle of slower economic growth.
In the third quarter, China's gross domestic product expanded 9.6 percent year on year, weakening from the gain of 10.3 percent in the second quarter and 11.9 percent in the first three months.
Li Maoyu, an analyst at Changjiang Securities Co, said businesses in China, which are still dominated by industrial companies, should also be alert to growing pressure from higher prices of major commodities and more expensive loans.
"The chances of tighter monetary policy and volatile prices of production materials also worry companies in China," Li said.
Falling confidence among businesses has already been noticed in an earlier report by the National Bureau of Statistics.
Its Entrepreneurs' Confidence Index fell to 133 in the second quarter, down 2.5 points from the previous quarter, the first fall in more than two years.
The China Business Sentiment Survey, compiled by Market News International, found that overall conditions for Chinese companies fell to 65.03 this month from 69.54 in September. But the October index was still above the readings of 62.16 in August and 64.94 in July.
"A drop in confidence is the result of higher input inflation, lower availability of credit and expectations of higher interest rates," the survey said.
China's economic growth has eased in recent quarters as the government stepped up moves to contain pollution and ease demand in a bid to reduce risks of overheating.
But some analysts also viewed the moderation as the beginning of a cycle of slower economic growth.
In the third quarter, China's gross domestic product expanded 9.6 percent year on year, weakening from the gain of 10.3 percent in the second quarter and 11.9 percent in the first three months.
Li Maoyu, an analyst at Changjiang Securities Co, said businesses in China, which are still dominated by industrial companies, should also be alert to growing pressure from higher prices of major commodities and more expensive loans.
"The chances of tighter monetary policy and volatile prices of production materials also worry companies in China," Li said.
Falling confidence among businesses has already been noticed in an earlier report by the National Bureau of Statistics.
Its Entrepreneurs' Confidence Index fell to 133 in the second quarter, down 2.5 points from the previous quarter, the first fall in more than two years.
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