SHANGHAI, China, Nov. 24 /Xinhua-PRNewswire/ -- Xinhua Finance (TSE
Mothers: 9399) and Market News International (MNI), a part of the news
service line of Xinhua Finance, today announced the November Xinhua
Finance/MNI China business sentiment survey. The results of the survey
suggest Chinese companies have weathered government-imposed investment and
credit controls and are now benefiting from slowing input price rises and an
improved bottom line.
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The survey was carried out November 6-21 with 150 listed companies
responding. A result greater than 50 implies growth or improving conditions
(See accompanying story for more on the survey methodology). The full survey
results can be found at
http://www.xinhuafinance.com/en/main/chinabizsurvey.html .
While the indexes for current conditions have mostly improved and are
well off their lows from the middle of the year, some of the key indexes
showing the outlook for conditions in three months fell, most likely due to a
combination of seasonal factors and expectations of slower growth next year.
"While the survey indicates conditions are generally quite positive, it’
s clear from the results that there are expectations of a general slowdown
going into next year," said Logan Wright, Beijing-based analyst with Stone &
McCarthy Research Associates, a sister company of Market News International.
The index for current overall conditions hit 75.67 in November, up from 68.44
in October and the second highest result for the index after the first
quarter of 2005, which was the first survey in the series. "Business
sentiment regarding current economic conditions has recovered considerably
since the summer, when the government’s macroeconomic controls began to take
effect," noted Wright.
With raw materials prices either falling or moderating because of
government measures amid a general global price decline for things like oil
and steel, the index for input prices fell to 57.19 from 64.23 in October,
the lowest ever result.
At the same time, the index for prices received suggests more companies
were able to increase their prices. That index rose to 57.43 from 55.80 in
November.
According to the survey result, the index for companies’ current
financial position hit the highest mark ever, at 71.72 in November from 67.63
in October.
"With coal prices remaining stable, we were able to increase profits,
said one power producer. A maker of metal products had a similar story,
saying that the prices of his products were increasing while prices of his
main raw material was falling "which contributed to an increase in the
company’s gross profit."Companies also continued drawing down inventories,
with that index falling to the lowest-ever level at 40.88, down from 42.80 in
October. The index for productive capacity increased to 71.38 in November,
the first increase since the first quarter of the year and up from 62.59 in
October. The index for production also rose, to 70.63 from 68.75 last
month.On one of the few negative notes for current conditions, the survey
suggested that companies were seeing the growth of order backlogs slowing,
with the index falling to 51.88 in November from 55.08 in October.
There were more negatives seen in the indexes for expectations of
conditions in three months. Some of the decreases in index levels matched
results seen in the expectation indexes for the fourth quarter last year,
suggesting that the results may be partially explained by a seasonal slowdown
in the first part of the year.
But at least some of the decline in sentiment must be due to expectations
that Chinese growth and business activity will slow next year.
The index for new orders in three months fell to 69.72, its lowest ever.
The index for productive capacity growth fell to 65.52, close to the lowest-
ever mark for that index.
"The results suggest that companies are preparing for a slowdown next
year from the very fast growth seen this year," said Wright.
Xinhua Finance/MNI China Business Survey Methodology
The Xinhua Finance/MNI China Business Sentiment Survey was conducted
November 6-21 with 150 listed companies taking part.
Survey questions were modeled on Japan’s Tankan survey and the U.S.
Institute for Supply Management’s Report on Business.
Results were compiled for both current conditions compared with a month
ago and for expectations of conditions one month ahead.
Indexes were compiled using the Institute for Supply Management’s
example: adding half of the percentage saying conditions were unchanged to
the percentage of those saying conditions had improved generated the index.
Therefore, a result higher than 50 indicates a net positive response.
Companies agreed to participate in the survey, and to provide comments
about business conditions, under the assurance that individual survey
responses would not be divulged except as part of the overall results.
Companies surveyed were all listed on domestic stock markets or in Hong
Kong, although some also have foreign listings. The companies chosen were a
mix of manufacturers and non-manufacturers with about 75% of the companies
responding to the survey in manufacturing.
About Xinhua Finance Limited
Xinhua Finance Limited is China’s unchallenged leader in financial
information and media, and is listed on the Mothers board of the Tokyo Stock
Exchange (symbol: 9399) (OTC ADRs: XHFNY). Bridging China’s financial
markets and the world, Xinhua Finance serves financial institutions,
corporations and re-distributors through four focused and complementary
service lines: Indices, Ratings, Financial News and Investor Relations.
Founded in November 1999, the Company is headquartered in Shanghai with 20
news bureaus and offices in 19 locations across Asia, Australia, North
America and Europe.
For more information, please visit http://www.xinhuafinance.com .
About Market News International
Market News International (MNI), a Xinhua Finance company (
http://www.xinhuafinance.com ), is a financial news and information company
dedicated to the global fixed income and foreign exchange markets. MNI
joined the Xinhua Finance family in March 2004, bringing its niche expertise
and extensive distribution network. Headquartered in New York, MNI has news
bureaus and offices throughout the US, Europe and Asia.
With more than twenty years of history, MNI is a fully accredited news
agency providing focused, timely, relevant and critical intelligence for
market professionals. Its press credentials are accepted by all operations
of the U.S. Government, including the White House, the Federal Reserve, both
houses of Congress, all major agencies and cabinet departments, all similar
government operations in the G-7 countries, as well as by supranational
organizations such as the World Bank and the International Monetary Fund.
