Chinese industrial economy still faces severe problem of overcapacity, according to the latest CKGSB survey of over 2,000 industrial firms nationwide. The survey, led by CKGSB Professor Gan Jie, shows a significant rise in product prices in the fourth quarter of 2016, posing worrying signs of inflation. The investment confidence also remains low: only 1% of the firms considered it a “good” time to make fixed investments, a mere 2% made expansionary investments and 9% of firms made fixed investments. However, given the government’s commitment, the BSI team remains optimistic about the long-term outlook of the Chinese economy.
China’s Industrial Economy Contracts in Q2 2016: Long-term Outlook Remains Positive
China’s industrial economy remains at the bottom of an L-shaped economic trend, according to the latest CKGSB survey of over 2,000 industrial firms nationwide. The survey, led by CKGSB Professor Gan Jie, shows that overcapacity and weak demand remain the biggest challenges for China’s industrial economy. The Business Sentiment Index, a major indicator of the survey, stood at 46 in Q2 2016, the same with last quarter, but still indicative of contraction. The BSI is the simple average of three diffusion indices including current operating conditions, expected change in operating conditions and investment timing.
China’s Industrial Economy: Overcapacity is the Biggest Challenge
China’s industrial economy did not stabilize: it declined in the first quarter of 2016, according to the latest CKGSB survey of over 2,000 industrial firms nationwide. The survey, led by CKGSB Professor of Finance Gan Jie, shows that overcapacity and weak demand remain biggest challenges for China’s industrial economy. The Business Sentiment Index, a major indicator of the survey, stood at 46 in Q1 2016, a one point increase from Q4 2015, but still indicative of contraction. The BSI is the simple average of three diffusion indices including current operating conditions, expected change in operating conditions and investment timing.
China’s Industrial Economy is At a Crossroad: Better Days Ahead?
CKGSB’s Business Sentiment Index shows that China’s industrial economy has finally stabilized after a year of contraction.
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