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![Investors looking at an electronic stock price indicator board at a stock exchange in Chongqing on Sep. 8. The Chinese stock market drop to a record low that day. [Xinhua]](http://images.china.cn/attachement/jpg/site1007/20080923/0011111fa1560a428eee03.jpg "Investors looking at an electronic stock price indicator board at a stock exchange in Chongqing on Sep. 8. The Chinese stock market drop to a record low that day. [Xinhua]")
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Investors looking at?an electronic stock price indicator board at a stock exchange?in Chongqing on Sep. 8. The Chinese stock market drop to a record low? that day. [Xinhua] |
Chinese entrepreneurs and bankers are concerned about a domestic economic slowdown more than before, according to a quarterly survey by the central bank in the third quarter.
Consumers, meanwhile, are showing weakening inflation expectations in the fourth quarter.
A survey of about 5,000 businesspeople show they have higher expectation of an economic slowdown, the People's Bank of China said in a statement on its website.
The macroeconomic expectation index, which gauges entrepreneurs' confidence in future economic growth, dropped sharply to 1.3 percent in the third quarter from 10.3 percent in the second quarter and 16.8 percent in the third quarter of last year. It was the lowest point since last year.
The overseas order index also dropped to 2.6 percent from 5.2 percent in the previous quarter. The index for the fourth quarter was 4 percent, down from 6.2 percent in the second quarter. Both hit new lows since July 2005, when the country de-pegged the yuan from the dollar.
So far, the yuan has appreciated about 20 percent against the dollar, which, coupled with the reduced foreign demand as a result of global economic slowdown, has led to bankruptcy of many exporters.
The raw material purchase price index has also dropped, indicating entrepreneurs are expecting weaker price rises in the coming months. In August, the producer price index, which gauges factory-gate prices, rose 10.1 percent, a new high after it hit 10 percent in July.
Meanwhile, 13.6 percent of bankers surveyed in 2,900 bank branches said they expected the economy to be "fairly inactive" in the fourth quarter - the highest since the survey was conducted in 1994.
These indices show the economy is still facing the risk of a major economic slowdown and may not improve at least in the fourth quarter, analysts said.
"I don't see any possibility of an economic recovery in the next two quarters," said Zhang Lan, head of research at Changjiang Securities in Shanghai.
On inflation, 42.8 percent of the 20,000-odd urban residents surveyed believed prices will continue to rise, down from 50.6 percent in the previous survey. The number of consumers who think prices are unacceptably high also dropped to 40.5 percent from 45 percent in the previous quarter and 49.2 percent in the first quarter, according to the survey.
As the economy slows, only 24.5 percent of those surveyed expect their incomes to rise, down from 35.2 percent in the survey conducted in the first quarter, indicating a weakening of consumer confidence.
People are shunning property and stocks and would like to put their money in bank deposits, the survey shows. Only 13.3 percent said they intend to buy a house in the next three months, the lowest percentage since the quarterly survey began in 1999. The proportion of such people in big cities such as Beijing, Shanghai and Tianjin are all below 10 percent.
(China Daily September 23, 2008)
