Economy

Economy expands despite tighter policies

By Li Woke (China Daily)
Updated: 2011-01-08 10:20

BEIJING - China's business climate index, a major measure of the macroeconomic outlook, rose to a three-year high of 138 in the fourth quarter of 2010, indicating economic expansion despite tightening credit, the National Bureau of Statistics (NBS) said on Friday.

The quarterly business-climate index gained slightly by 0.1 point in the fourth quarter of 2010 and rose 7.4 points on a year-on-year basis, the NBS said in a statement on its website.

The index, based on a survey of nearly 20,000 Chinese companies, has a range from zero to 200. A reading above 100 shows economic expansion, and any reading below that level indicates contraction.

Related readings:  China's business climate index gain in Q3  China sees smaller decline in biz climate index, confidence recovers  Q4 business climate index drops on slowing economy  Business climate index plunges in Q3

The sub-index for the IT sector rose 7.5 points to 159.7 in the fourth quarter from the previous three months, and the sub-index for the retail sector declined marginally, but was still high at 149.6 in the October to December period.

Meanwhile the sub-index for the industrial sector and real estate industry was unchanged in the fourth quarter, according to the statement.

The sub-index for small companies declined in the fourth quarter, while the measure for medium and large companies increased during the same period, the NBS said.

"The index showed China's economy continued to expand in the fourth quarter despite tightening monetary policies," said Bian Xubao, an analyst at QiLu Securities.

In 2010, China's gross domestic product (GDP) jumped as high as 11.9 percent in the first quarter, followed by 10.3 percent in the second, and 9.6 percent in the third, compared with the year-earlier figures.

"Fourth quarter GDP in 2010 may be around 9 percent and the Consumer Price Index, a main gauge of inflation, may reach 3.3 percent for the whole year," Bian said.

"That will exceed the 3 percent target set by the central government."

Following its annual work meeting on Monday, the People's Bank of China announced that fighting inflation and stabilizing prices will become a higher priority in 2011.

On Friday, the NBS also released the index of entrepreneur confidence.

It rose by 1.1 points to 137 in the fourth quarter last year, showing that confidence has steadily increased among Chinese business leaders in the wake of the 2008 global economic crisis.

The index also reflected a rise in confidence in the IT, industrial and construction sectors in the fourth quarter from the previous three months.