China Business Sentiment Improves First Time in 5 Months: Survey
The Chinese government’s recent $150 billion infrastructure push has helped improve sentiment among the country’s business community, shows a private-sector survey.
Preliminary findings of the Market News International (MNI) China Business Sentiment survey released on Friday, show increased optimism among Chinese companies in early September - for the first time in five months.
The index rose to 50.31 from the final reading in August of 47.54.
The survey coincided with the announcement by the Chinese government on September 7 that it had approved 60 infrastructure projects worth more than $150 billion to speed up investment spending.
“Although these projects (in China) were laid out previously, it signals that the government is prepared to do something to boost the economy,” Phil Day, Asia news editor for Deutsche Börse-owned MNl told CNBC.
He added that the final reading expected at the end of the month will continue to be positive given the monetary easing announced by the U.S. Federal Reserve on September 13.
Other sub-indices in the monthly survey of 160 Chinese firms also came in higher. These included sentiment on financial positions, availability of credit and new orders, Day said.
Beijing has cut interest rates twice and eased banks’ reserve requirement ratios, which freed more capital for loans, three times since last November, to bolster an economy that slowed to its weakest pace in three and half years in the second quarter.
“Sentiment appears to be picking up,” Day said. “But we don’t know if we are seeing real conditions pick up yet so we really have to wait and see.”
Earlier this week, the HSBC flash Purchasing Managers Index for September also edged up slightly from August, suggesting that China’s manufacturing sector may be on its way to recovery.
—By CNBC’s Jean Chua.