China business confidence rises again

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Confidence among Chinese entrepreneurs has picked up for the second quarter running, according to the country’s central bank.

People’s Bank of China surveys showed the business confidence index rising to 51.2% in the third quarter.

That was 2.2 percentage points higher than in the second quarter.

China’s factory output and retail sales grew faster than expected in August, on the back of a strong housing market and government infrastructure spending.

Economic change

The world’s second largest economy has lost some of its momentum during this year, as it has entered a period of readjustment.

China is looking to transform its economy away from factories and exports towards domestic consumption.

The International Monetary Fund (IMF) expects China’s GDP to grow by 6.6% this year, close to the low end of China’s own official forecast of between 6.5% to 7%.

That will come after decades of near double-digit growth.

Housing costs

Meanwhile, a separate central bank survey showed a bankers’ confidence index rising to 46.5% in the third quarter, 2.8 percentage points higher than in the April to June period.

The survey showed one in five bankers believed monetary policy would be relatively loose in the fourth quarter of this year.

The People’s Bank of China has reduced interest rates six times in 22 months, and and also cut the amount of cash banks must keep in reserve.

And a third survey issued by the central bank at the weekend showed that 53.7% of households believed housing costs were “unacceptably high”, up 0.3 percentage points from the second quarter.

[Source:- BBC]