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CKGSB Data Shows Economy is Stabilizing, But Still in Contraction


China’s industrial economy in 2017 Q3 indicated a slight contraction, according to data from the CKGSB Business Sentiment Index, though there were also signs of recovery. Meanwhile, costs continued to rise significantly, overcapacity is still at a high level in terms of both its prevalence and magnitude, and firms said their concerns about environmental issues had intensified significantly.



Economy Still in Contraction as Business Sentiment Index Registers Below 50


Although official data for second quarter GDP and industrial growth exceeded expectations, we found that the industrial economy has not yet bottomed out. Our Business Sentiment Index in the second quarter stood at 46, indicating a slight contraction. Overcapacity continued to be at a historically high level. Product prices and costs continued to rise, but to a substantially lesser extent than in the previous quarter. Meanwhile, production stayed flat, while real estate has not been effective in boosting industrial growth and the gap between state-owned and private firms continues to widen.



China's Industrial Economy "Yet To Bottom Out"


CKGSB Finance Professor Gan Jie’s 2017 Q1 large-scale company survey report on China’s industrial economy reported a business sentiment index of 47 in Q1, one point above the previous quarter, but still indicating a slight contraction and showing that the industrial economy has not yet bottomed out. Surveying more than 2,000 Chinese companies from within the industrial sector, the 2017 Q1 report also found that overcapacity continues to be at a historical high, while the production diffusion index stayed flat following a brief expansion in 2016 Q4.



Industrial Report Shows Product Prices Rise, Production Expands in 2016


CKGSB’s large-scale survey on China’s industrial economy revealed a significant rise in product prices in Q4, with production costs a main driving factor. Meanwhile, the survey’s Business Sentiment Index (BSI) stood at 46, indicating a slight contraction, while investment remained sluggish. Elsewhere, overcapacity, inflation and cost rises should be carefully watched in 2017, according to the report’s author Gan Jie, Professor of Finance at CKGSB, who commented that a loosening of monetary policy would not revive China’s industrial economy, given the country’s overcapacity issue.



China’s Industrial Economy "Not Yet Stable"


CKGSB Finance Professor Gan Jie’s detailed Q3 report on China’s industrial economy has registered a Business Sentiment Index (BSI) and employment index both below 50 in Q3, indicating contraction. Firms’ fixed investment remained sluggish: only 8% of firms made fixed investments in the third quarter, while a mere 2% made expansionary investments. Commenting on the survey results, Prof Gan Jie said, “While weak demand and overcapacity remain the biggest challenges facing the industrial economy, on the positive side, after five quarters of persistent decline, production has stabilized due to an expansion in consumer goods.”



China's Industrial Economy Contracts in Q2, But Long-Term Outlook Remains Positive


Although China’s official GDP figure in Q2 was better than expected, CKGSB Finance Professor Gan Jie’s detailed Q2 report on China’s industrial economy, which surveys directly more than 2,000 Chinese companies, indicates that the industrial economy is still at the bottom of an L-shaped economic trend. The report’s business sentiment, production and employment indices all posted figures below 50, indicating contraction.



China's Industrial Economy Declines in Q1, Excess Capacity at Record High


In contrast to recently published economic data, the detailed quarterly survey from CKGSB’s Center on Finance and Economic Growth indicates that China’s industrial economy did not stabilize in the first quarter of 2016, but in fact declined. But with credible data about China’s economy increasingly hard to come by, the survey – authored by CKGSB Professor of Finance Gan Jie – arguably showcases the most comprehensive set of data currently available due to its thorough fact gathering from more than 2,000 Chinese companies from within the industrial sector.



Overcapacity Worsens in 2015, with Industrial Economy in Contraction


As Chinese Premier Li Keqiang closed the 2016 Lianghui parliamentary sessions by sounding some optimistic notes about China’s economy, a new report from CKGSB’s Center on Finance and Economic Growth suggests several policy recommendations that are necessary to safeguard the long-term future of China’s industrial sector.



No Quick Fix Likely for Chinese Economy in Near Future


The problems with China’s industrial economy are structural and fundamental, writes CKGSB Professor Finance Gan Jie, as the latest results of her large-scale quarterly study of the economy paint a sobering picture, even if the risk of a hard landing is slim.



E-commerce and Internet Trends: US vs China


Given that the Internet has changed everything – the way we live, the way we consume, the way we communicate – it can be viewed as the third industrial revolution, writes MBA student Boris Nikolic.



Weak Demand Still a Challenge, but Outlook Improves for China


Some interesting trends about China’s industrial economy have begun to emerge from the latest installment of CKGSB Professor Gan Jie’s quarterly survey.



Excess Capacity and Sluggish Investment Hit Chinese Economy


Finance Professor Gan Jie’s latest quarterly survey reviews 2014 as whole and looks ahead to what the new year might bring.



Financing Not an Issue, but Weak Demand Remains a Concern


The current state of China’s economy is revealed with an in-depth analysis of 2,013 Chinese firms by CKGSB Finance Professor Gan Jie.



China’s Industrial Economy at a Crossroad


Finance Professor Gan Jie details some surprising insights about China’s industrial economy, with the launch of her groundbreaking quarterly large-scale survey.



What Chinese Entrepreneurs Can Learn from Japan


Chinese entrepreneurs need to stop focusing so much on short-term profits and think more about laying a basis for long-term growth, maintains Dean Xiang Bing.



How to Meet China's Cost Innovation Challenge


To stay competitive, foreign companies need to adopt a more Chinese approach to cost cutting, says Professor of Strategic Management Zeng Ming.



The Contrarian: Innovate for the Right Reasons


Strategy Professor Liao Jianwen explains why mobile phone makers must shift their innovative focus to better compete with low-end copycats.



Before the Chinese Economic Miracle: A Brief Overview of the PRC's First 25 Years


Economics Professor Li Wei revisits economic policy from the founding of the People's Republic of China to Mao's death in 1976.



The Fallacy of Industry Boundaries


As industry boundaries crumble, companies must transform the way they think about competition, writes Strategy Professor Liao Jianwen.



The Next Stage: Time for Chinese Business to Move beyond Manufacturing


Chinese companies stuck in a low-end manufacturing rut have traditionally eked out a living through fierce price competition – a strategy that's no longer sustainable, writes Dean Xiang Bing.