Business confidence rebounds despite little change in output

China's business climate index - a major gauge of the country's macroeconomic outlook - climbed back in the third quarter from the lowest level within a year seen in the second quarter, data released on Friday showed.

The business climate index stood at 121.5 points in the third quarter, up 0.9 points from the previous quarter, according to the data released by the National Bureau of Statistics.

The figure was well above the boom-bust line of 100 points, which indicates that Chinese companies are still operating smoothly, even amid the slow global economic recovery.

Both the current business climate index and the future business climate index were 0.9 points higher than in the previous quarter, while the entrepreneurs' confidence index was at 119.5 points, 2.5 points higher than in the preceding quarter.

The indexes range from zero to 200. A reading above 100 indicates expansion, while a reading below that points to a contraction.

About 73 percent of the companies polled said that business conditions are favorable to turning a profit, up 1.5 percentage points compared with the previous quarter.

"We expect to have positive growth of net profit of about 5 percent, thanks to the slight economic recovery in the third quarter, although our performance in the first half was not promising," said Li Jianfeng, general manager of Xinshen Group Co Ltd, a manufacturer of fine linen products based in Wujiang, Jiangsu province.

In the first three quarters, the total value added, calculated at comparable prices, of industrial companies was up 9.6 percent year-on-year, an increase of 0.3 percentage point compared with the first half, the NBS said.

Industrial production rose 10.2 percent year-on-year in September, down from August's 10.4 percent increase. September's growth was still the second highest this year.

Last month's growth slowdown was in line with market expectations. Previous data had showed industrial power consumption up 8.1 percent year-on-year in September, down from the 12 percent increase in August.

"The innovative management methods applied by the State Council in the third quarter and a series of policies issued to stimulate economic growth enhanced confidence among companies as a whole," said Sheng Laiyun, a NBS spokesman, at the news conference to release the third-quarter data.

Sheng added that the recovery of the global economy resulted in an increase in the number of overseas orders, a rebound from the lackluster figure seen in the second quarter.

About 80 percent of companies said that the order pipeline was at least at a normal level or even above that, 0.2 percentage point higher than in the second quarter.