PBoC Quarterly Survey Shows Optimism
Chinese optimism rises and falls with liquidity. While consumers and bankers are generally more optimistic, businesses turned pessimistic about profits and domestic orders in Q1. The first chart shows companies seeing better liquidity, while the second shows the dip in profit expectations.
Bankers are more optimistic as well, in line with rising liquidity. Bankers are getting nervous about monetary policy though.
The depositor survey showed inflation concerns are rising. Those saying they spend more on consumption was 23.8 percent, up 0.7 percentage points from the last survey. Those saying they invest more was 33.9 percent, and save more was 42.3 percent.
A gauge of banker confidence in the economy rose to 64.9 in the first three months of this year, according to the quarterly People’s Bank of China survey of about 3,200 banks and 5,000 enterprises nationwide. That was the highest reading in three years. Confidence among entrepreneurs climbed to 61.5, a two-and-a-half year high. Anything above 50 suggests respondents are optimistic.
The good vibes come after the economy accelerated in the fourth quarter of last year as a credit-fueled rally in smokestack industries gained momentum. Outstanding credit at year-end was equal to about 258 percent of gross domestic product, up from 160 percent in 2008, Bloomberg Intelligence estimates. The stronger economic performance is giving policy makers more maneuvering room as they try to rein in leverage and bubbles without derailing growth.
In a third survey tracking urban households, 52.2 percent said property prices are too high, down a fraction from the past three quarterly readings. The share who said they plan to buy a house in the next quarter rose to 22.9 percent from 13.6 percent a year earlier.
Source: (links open PDFs)