The results of a second quarter survey conducted by the People’s Bank of China shows that many Chinese entrepreneurs still hold a dim view of the country’s economic health, while banks remain concerned about the impact of monetary policy.
According to the PBOC Entrepreneur Macroeconomic Warmth Index for the second quarter of 2017, 34.4% of Chinese entrepreneurs think that the economy is “cool,” 63.4% consider it to be “normal” and only 2.3% view it as “warm.”
The total value of the index is 34%, for a rise of 2.7 percentage points compared to the preceding quarter, and a year-on-year gain of 9.9 percentage points.
The Loan Aggregate Demand Index for Q2 stands at 66.9%, for a decline of 1.1 percentage points compared to the preceding quarter. Manufacturing sector loan demand held steady at 57.2%, while non-manufacturing loan demand fell 1.6 percentage points compared to the preceding quarter to 61.4%.
Lending demand for large, medium and small-sized enterprises edged lower across the board on a quarterly basis, falling 0.6, 0.5 and 1.2 percentage points respectively to 58.8%, 59.6% and 61.4%.
In addition to contracting loan demand, the PBOC survey also points to a dimming view of market liquidity.
The Monetary Policy Impression Index was 36.6% in Q2, for a 6.4 percent point decline compared to the preceding quarter, and a 21.7% decline compared to the same period last year.
30.1% of banker believe that monetary policy is “cool,” for a rise of 9.8 percentage points compared to Q1, while 66.6% view it as “appropriate, for a decline of 6.9 percentage points,
The Monetary Policy Impression Index for the upcoming quarter is 37.4%, for a gain of 0.8 percentage points compared to the current quarter.