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Bankers confident about future growth

By Feng Jie (China Daily)
Updated: 2006-03-18 07:01

Chinese bankers are confident about the country's future economic growth and are satisfied with the government's monetary policies, an investigation has revealed.

A survey of 2,800 banking institutions put the Bankers' Confidence Index at 82.4 per cent, the highest since the survey was started by the People's Bank of China (PBOC), the central bank, at the beginning of last year.

Of the surveyed bankers, who are presidents of both local and foreign banks and senior managers at provincial and city level subsidiaries, 82.6 per cent said they believed the performance of the economy was "normal" in the first quarter. Some 80.1 per cent predicted normal economic growth over the next three months.

"This positive judgement is not only a recognition of last year's macroeconomic performance, but an expression of confidence in the national economy's health and stability," the PBOC said in a report published on Friday.

"The continued uptrend in the Bankers' Confidence Index indicates that they are optimistic about the economy's prospects."

The Chinese economy grew by 9.9 per cent last year. Economists widely believe it will continue to grow by no less than 9 per cent this year, although the official target is set at 7.5 per cent.

But the views expressed by bankers come in contrast to those expressed by many economists, the central bank noted. Some economists say economic growth is perhaps too high, citing figures such as high growth rates for fixed investment.

Others hold the opposite view, fearing that deflation may be around the corner as overcapacity in certain sectors threatens to push down prices.

Chinese bankers also expressed satisfaction over monetary policies in the first quarter, with 81 per cent of those surveyed saying they were "appropriate."

The central bank has downscaled its growth target for the broad measure money supply M2 to 16 per cent for this year. It is lower than 2005's 17 per cent target, which was revised up from 15 per cent at the beginning of last year as real growth outpaced expectations.

This indicates the central bank still wants to keep control of the money supply and has no intention of letting go this year, analysts say.

M2 growth was 18.8 per cent at the end of last month, down by 1.8 percentage points from January.