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Key business climate index falls again

A KEY barometer of China's business climate fell for a third consecutive quarter, albeit more slowly, as the global financial crisis continued to weigh on the economy.

The country's business climate index for the first quarter dropped to 105.6 points from 107 points in the final quarter of last year, data released by the National Bureau of Statistics yesterday showed.

The drop was smaller than the 21.6-percentage-point drop in the fourth quarter from the third last year.

The index, a measure of the state of various industries and their future expectations, ranges from zero to 200. A reading above 100 shows economic expansion, while one below 100 indicates contraction.

By sector, the manufacturing sector rose to 98.4, the bureau said without giving a comparable figure. The construction sector tumbled due to seasonal reasons, it said.

The sub-index for overseas-invested companies was 104.6, roughly flat with the previous quarter.

Meanwhile, the bureau said the nation's business confidence index rebounded to 101.1 points in the first quarter from 94.6, an eight-year low, in the last quarter of last year.

Confidence in a range of industries, from property, transport, retail to information technology and industrial, gained while the service sector saw a decline.

A number of leading economic indicators are pointing to a recovery in growth due to the government's 4-trillion-yuan (US$586 billion) stimulus plan, central bank Governor Zhou Xiaochuan has said.

Last week, the China Federation of Logistics and Purchasing said the Purchasing Managers' Index of the country's manufacturing sector rose for the fourth straight month last month to 52.4 percent, up 3.4 percentage points from a month earlier. It was the first time the PMI rebounded above 50 percent since July, when the index fell to 48.4 percent. A reading of above 50 suggests growth, while one below 50 indicates contraction.


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