Concerns about an overheated economy grew sharply among Chinese
entrepreneurs and bankers in the second quarter, according to the
People's Bank of China surveys.
In a quarterly survey, 14 percent of 5,635 entrepreneurs
expressed concern that the economy, which hit its highest point
since the first quarter of 1994, was expanding too quickly.
The entrepreneurs' confidence index fell to 83.4 percent, the
lowest level in two years. The index was 87.1 percent in the same
period last year and 88.5 percent in the first quarter this
year.
The entrepreneurs surveyed said they think the economy will
continue to overheat in the third quarter, with the overheating
expectation sub-index hitting a record high of 8.6 percent.
In another quarterly survey of 2,850 banking institutions, a
growing number of bankers said they believe the economy is fairly
hot.
More than 67 percent of respondents said the economy was
overheating to some degree while 32 percent thought the economic
situation remained normal. The central bank did not provide
comparative figures.
The survey said 57.8 percent of bankers expected the economy to
continue overheating in the third quarter.
The bankers were not optimistic about future economic
conditions. The bankers' confidence index dropped sharply to 36.7
percent from 60.6 percent in the first three months this year.
This is the second time the index has dropped below the critical
level of 50 percent since the beginning of 2004. It dropped to 43.8
percent in the third quarter last year, the survey said.
Forty-three percent of bankers braced for a further tightening
of monetary policies in the third quarter.
Chinese entrepreneurs also anticipated tightening measures, such
as raising interest rates, in the next three months.
The central bank has increased interest rates twice and raised
the banks' reserve requirements four times this year to prevent the
economy from overheating.
The moves have gradually taken effect. Among the surveyed
entrepreneurs, 25.8 percent said the lending rates were relatively
high this quarter.
(China Daily June 21, 2007)