CEMAC: Business Climate Index Declined in the First Quarter

China Economic Monitoring and Analysis Center (CEMAC): National Business Climate Survey results showed that the business climate index (BCI) was 127.3 in the first quarter, dropped 0.5 points over the fourth quarter of previous year, the decreasing amplitude narrowed 7.3 points quarter-on-quarter, which appeared signs of stabilization after continued decrease. Of which, the current BCI was 120.3 in this quarter, dropped 7.9 points quarter-on-quarter, expected BCI was 132.0, increased 4.4 points quarter-on-quarter.

In terms of different industries, the rank of BCIs followed by the information transmission, computer services and software industry, whole sale and retail trade, social services, construction, hotel and catering service, industry, transportation, storage and postal industry, and real estate was 154.8, 139.5, 134.4, 132.1, 125.8, 123.2, 119.7, and 108.0 respectively. As compared with the results of the fourth quarter in 2011, the BCIs of industry, real estate, and construction remained at the same level, that of information transmission, computer services and software industry, whole sale and retail trade, transportation, storage and postal industry, hotel and catering service, and social services dropped 9.1, 7.4, 3.4, 2.9, and 2.0 points respectively.

In terms of sub-branches of the industry, the industries with high prosperity from high to low in descending order were tobacco, pharmaceutical, food, agro food processing, and beverage manufacturing, the BCIs were above 130.

the industries with lower prosperity low to high in ascending order was followed by manufacturing of iron and steel, chemical fiber, non-metallic mineral products, textiles, petroleum processing, chemicals, and nonferrous metals, the BCIs were below the 110, of which, the first four industries in a recession interval (the sentiment index is less than 100).

In terms of different types of registration, the BCIs of state-owned enterprises, collective-owned enterprises, joint-stock cooperative enterprises, joint ventures, limited liability companies, cooperation limited, private enterprises, enterprises with funds from Hong Kong, Macao, and Taiwan, and foreign funded enterprises was 129.7, 111.7, 121.4, 113.3, 124.5, 134.5, 122.2, 123.9 and 129.3 in the first quarter. As compared with the fourth quarter of previous year, the BCIs of joint-stock cooperative enterprises, private enterprises, limited liability companies, collective-owned enterprises, and state-owned enterprises climbed 12.4, 5.8, 1.8, 1.7 and 0.8 points respectively, that of joint ventures, enterprises with funds from Hong Kong, Macao, and Taiwan, foreign funded enterprises, and cooperation limited dropped 7.3, 5.1, 4.2, and 0.9 points.

In terms of different regions, the BCI of central region was higher than the eastern and western regions. In the First quarter, the BCIs of eastern, central and western regions stood at 128.8, 130.0 and 124.6, declined 5.6, 3.7 and 5.5 points respectively over third quarter.

Annotations:

1. Calculation Methods Improvement

In order to more fully reflect the anticipation of business sentiment survey on the economic situation, learn from the mature experience of international business sentiment survey authority, starting from the first quarter of 2012, we improved the calculation method of the business climate index, i.e. the BCI has been published entirely in accordance with entrepreneurs judgments The preparation of the current situation, improve to the judgment of the current situation and future expectations, and give the expected relatively higher weight.. Specifically, the BCI is the weighted average of current business climate index (used to reflect the entrepreneur's judgment on current business good or bad conditions) and the expected business climate index (mainly used to reflect the entrepreneur level of optimism about the future of corporate business expected), the current BCI weight of 40 percent, the other is 60 percent. According to the definition of index defined after improvement, quarterly BCIs in 2011 are as follows:

2. Explanatory Notes

The business climate index is comprehensively reflects the economic situation and the expected direction, through out by the good or bad judgments on the business situation from the entrepreneurs from the business climate survey. The range of BCI is between 0-200, 100 as the critical value, when the index is greater than 100, reflecting the business climate state is good and optimistic, the more close to 200 the higher the level of optimism; less than 100, reflect the state of the business climate is poor and pessimistic, closer to 0 reflect deeper pessimistic.

3. Statistical Coverage

The survey covers eight sectors: industry, construction, wholesale and retail trade, transportation, storage and postal services, hotel and catering industry, information transmission software and IT services, real estate, and social services. Each industry is according to the scale of the proportion of a sample.

4. Survey Methods

Samples were selected by adopting the sampling methods of stratified, probability proportional to size (PPS). The national total sample size was 21,000 enterprises. The responsible persons report online directly.

5. Survey Contents

Survey involved in the business running, enterprises operation, profitability, employment, investment, financing, inventory and other production and management problems.

6. Calculation Methods

The business climate index = 0.4×Current BCI +0.6×Expected BCI

Current BCI = the proportion of good by the answer from the responsible persons in charge of the enterprise operating conditions in the current quarter - poor proportion of +100

Expected BCI = the proportion of good by the answer from the responsible persons in charge of the enterprise operating conditions in the next quarter - poor proportion of +100

7. Classification of Eastern, Central and Western Regions

Eastern regions including Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong, Hainan; central regions including Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei, Hunan; western regions including Inner Mongolia, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang.