Indicator shows Business Sentiment in China Recovers

Business sentiment in China is improving as the economy shows signs of stabilizing, new analysis showed on Friday.


Financial information provider Market News International’s (MNI) reading of business sentiment came in at 50.5 in April, up from 49.9 in March.

Central bank governor Zhou Xiaochuan said China's reform direction was clearThe indicator, released since 2007, is based on monthly polls of Chinese business executives on business conditions and expectations for the economy.

The latest increase was in contrast to an average decline of 0.9 percentage points between March and April over the 2011-2015 period, Japanese securities trader Nomura said in an analysis note.

“We believe growth momentum may have improved slightly in April from March, boosted by rounds of policy easing,” it said.

Another indicator also pointed to firmer economic stabilization. The manufacturing activity index for small- and medium-sized enterprises, released by China Minsheng Bank and China Academy of New Supply-side Economics, climbed 3.3 percentage points to 46.9 in April.

Nomura forecast the official purchasing managers’ index measuring manufacturing activity would rise to 50.3 in April from 50.2 in March.

A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

China’s economy expanded 6.7 percent year on year in the first quarter, slowing further from the previous quarter but better than many had feared.

Authorities have taken a string of measures since last year to mitigate the downshift, cutting interest rates, reducing taxes and slashing overcapacity.

Source: Xinhua

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