Professor of Economics, Associate Dean for Asia, Director of the Case Center, Director of China Economy and Sustainable Development Center, Cheung Kong Graduate School of Business (CKGSB)
PhD, University of Michigan
Corruption, Financial Markets, Macroeconomics, Managerial Incentives and Market Competition, Real Estate, Reform, Taxation, Telecommunications Privatization, Valuation in Emerging Markets
According to the CKGSB Business Conditions Index (BCI), businesses in China remain confident, but it remains unclear if they will continue to. In October 2015, the BCI posted a figure of 54.0, a mild rise over September’s 51.1 and slightly above the confidence threshold of 50. The BCI hit a 14-month high of 61.3 in May 2015 before sliding steadily, with readings from July to September hovering above 50, indicating that the sample firms became less optimistic about business conditions with regard to the following six months. Despite a moderate rally, it is unclear whether the momentum will hold and so companies need to remain cautiously optimistic.
The CKGSB Business Conditions Index shows that companies are expecting the Chinese economy to encounter some difficulties in the coming six months.
The Chinese economy is slowing and that has significant ramifications for things like capital and the Renminbi. Is there a silver lining in all this?
This week, China’s central bank finally bit the bullet and cut the required reserve ratio by 50 basis points; and the manufacturing purchasing managers’ index hit a new low