Chinese business confidence plunged in the final three months of 2008 to an eight-year low as the mounting effects of the financial crisis weighed on exports and industrial output, an official survey showed today.
The business confidence index fell 29.2 points in the fourth quarter to 94.6, the National Bureau of Statistics said.
That is the lowest reading since the start of 2001, the earliest date for which official figures are available.
Hardest hit were manufacturers, hurt by shrivelling demand in the United States and Europe and a weakening domestic property sector. Their sub-index plummeted 32.1 points from the third quarter to 87.2.
That reading is in line with two purchasing managers' surveys published earlier this month, which showed a continued contraction in the sector, as well as economists' expectations that exports shrank more quickly in December.
"It is not surprising that the entrepreneur confidence index tumbled," said Sherman Chan, an economist with Moody's Economy.com in Sydney.
"The Chinese government has been persistently addressing the calls for help by struggling businesses, but it is the dire external sector that continues to haunt businesses."
The fall in confidence came despite a barrage of moves by authorities to prop up economic growth, including a 4 trillion yuan ($585 billion) stimulus package and repeated cuts in interest rates.
The bureau surveys 19,500 enterprises of all types to compile the index, which is meant to represent firms' views on the overall economic environment and macroeconomic policy.
Figures above 100 represents positive sentiment, while those below 100 signal a deteriorating outlook.
The outlook for the transport, storage and postal sector also worsened sharply, with its sub-index falling 28.1 points to 95.6.
Reuters