Confidence in the mainland economy among bankers and corporate executives has fallen substantially in the third quarter amid pervasive worries about overheating, while the general public has grown increasingly pessimistic due to soaring consumer prices, according to three government surveys.
The bankers' confidence index, which measures their view of the current quarter's economic health and their expectations, fell to a record low of 21 per cent in the third quarter, following a dive to 36.7 per cent in the second quarter, the People's Bank of China said on its website. It stood at 60.6 per cent in the first quarter.
In a joint survey by the central bank and the National Bureau of Statistics of heads at 2,850 banks, including foreign ones, across the country, 83 per cent of the respondents also said the economy was heated or overheated.
More than half the bankers expected monetary policy to be tightened next quarter and 60 per cent forecast another interest rate increase, believing the central government wanted to cool the economy and control rising inflation.
The consumer price index, a key measure of inflation, increased 6.5 per cent last month from August last year, an almost 11-year high on surging food prices. The central bank this year has raised interest rates five times and increased banks' reserve requirements seven times.
Despite the tightening measures, the banking sector prosperity index, which measures interest margins, rose 1.7 percentage points in the third quarter to hit a record 70.6 per cent, the central bank said. About 90.9 per cent of the banks made a profit, rising for a sixth consecutive quarter, the report said.
Loan demand from corporates remained strong, especially in the property and construction sectors.
