Two newly-released, independent surveys from the Cheung Kong Graduate School of Business (CKGSB) shed light on the Chinese economy and offer reform suggestions.
BEIJING, Dec. 1, 2016 /PRNewswire/ -- Although China's third quarter GDP figure met expectations, CKGSB Finance Professor Gan Jie's detailed report on China's industrial economy, which directly surveys more than 2,000 Chinese companies, indicates that China's industrial economy has not yet stabilized. The report's Business Sentiment Index (BSI) and employment index both registered below 50 in Q3, indicating contraction.
Commenting on the survey results, Prof Gan Jie said, "Weak demand and overcapacity remain the biggest challenges facing the industrial economy. On the positive side, however, production has stabilized due to an expansion in consumer goods. Elsewhere, in contrast to conventional wisdom, our industrial survey has consistently found that financing is not a bottleneck for the industrial economy."
Meanwhile, another independent survey from the Beijing-based school, the CKGSB Business Conditions Index (BCI), registered 60.8 in November, a slight improvement on October's overall index of 58.5, but both well above the confidence threshold of 50. The BCI has been climbing for three straight months, which shows that for CKGSB's sample of relatively successful businesses operating in China, the next six months are increasingly viewed with optimism.
Launched in June 2011 under the direction of CKGSB Economics Professor Li Wei, the CKGSB BCI comprises four sub-indices for corporate sales, corporate profits, corporate financing environment and inventory levels. In November, all four of these sub-indices rose.
Commenting on the survey results, Prof Li said, "Inventory levels remain a significant issue for the economy, with the index having lingered below the confidence threshold of 50 for much of the past five years. Meanwhile, the financing environment remains a critical issue for economic reforms going forward."
Established in November 2002, Cheung Kong Graduate School of Business is China's first faculty-governed and independent business school. CKGSB boasts more than 40 full-time professors, who have earned their PhDs or held tenured faculty positions at leading schools such as Harvard, Wharton and Stanford. Their research has provided the basis for nearly 400 case studies of both China-specific and global issues. More than half of CKGSB's 10,000+ alumni are at the CEO or Chairman level and, together, their companies accounted for one sixth of China's GDP in 2015.