Latest survey results

The key findings from the 2024 Q4 Business Sentiment Index (BSI) report are as follows:

In the fourth quarter of 2024, according to the CKGSB China’s Industrial Economy Report, the Business Sentiment Index (BSI) registered at 55, a marginal increase from the previous period’s 54, maintaining overall stability. The diffusion index of operating conditions climbed to 66, reflecting a positive performance. The diffusion index of expected change in operating conditions stood at 51, comparable to the previous period and marginally above the 50 threshold that demarcates growth from recession. The investment timing diffusion index advanced from 46 to 47; although still beneath the 50 mark, it signaled improvement.

Overall, these figures suggest that market operating conditions are steadily improving, with companies expressing optimism about the short term, but less so about the future. However, investment remains lackluster, primarily due to intense market competition and insufficient demand.

The production diffusion index (55) and the finished goods inventory diffusion index (54) saw a notable increase in Q4 compared to the previous quarter. Similar to the last quarter, production growth remained the dominant trend this quarter. This quarter, the cost diffusion index (60) and the price diffusion index (52) both rose. The growing market demand is driving up both prices and production costs, indicating a reduced risk of deflation.

Under the influence of countercyclical monetary policy adjustments, new corporate loans (5%) fell for two quarters in a row, with the countercyclical monetary policy adjustments, despite still being higher that the levels of the last quarter of the previous year and the first quarter in 2024. Financial institutions’ willingness to lend (98) remained stable as the last quarter. Industrial companies in China still generally perceive the macroeconomic sentiment as ‘cool’ or subdued. As the authors pointed out in the last edition of the report, regularly injecting stability into the market, making efforts to boost consumer confidence and encourage producers are all ways to help get economic recovery back on track.

The full survey can be downloaded via the links below.

For more information, or to arrange an interview with these two professors, please email Julie Tian xftian@ckgsb.edu.cn.