PBOC survey results signal confidence in the economy

The People's Bank of China, the nation's central bank, recently released the result of its survey of 5,000 industrial enterprises nationwide, which signaled their confidence in the sustained and stable recovery of the Chinese economy.

As the basic economic units, enterprises have the most direct feeling of how the economy is performing. The positive responses from the enterprises show the macroeconomy is continuing its upward trend as well as that enterprises are improving their businesses at the micro level.

Some of the indexes are especially important. The enterprise sentiment indicator is 56.3 percent, 26 percentage points higher than that during the same period last year; The profit indicator is 53.1 percent, 30.8 percentage points higher than that during the same period last year.

The PBOC's survey of banks provides additional support that the economy is showing good momentum. In the first quarter of this year, the overall loan demand index was 77.5 percent, an increase of 5.9 percentage points from the previous quarter and an increase of 11.6 percentage points from the same period last year. Among them, the manufacturing loan demand index was 72.2 percent, an increase of 3.6 percentage points from the previous quarter; the infrastructure loan demand index was 70.3 percent, an increase of 5.3 percentage points from the previous quarter; and the wholesale and retail industry loan demand index was 67.0 percent, an increase from the previous quarter of 2.7 percentage points. The continued strong demand for loans means the continuous increase of enterprise production investment, which indicates the potential for sustained and stable economic growth for a period of time in the future.

As the world's second-largest economy, China is fully able to cope with all challenges from outside. China has a huge population, a vast land with rich resources, and a comprehensive industrial system, which grant it incomparable advantages in economic development.

Especially, domestic demand has already become the main driving force of national economic development, which stabilized the economy and made its development of more high quality. More importantly, China is one of the few major economies to implement a normal monetary policy, and its monetary policy toolbox has sufficient reserves to maintain China's economic stability and long-term development.

The confidence of enterprises provides strong support for the nation's economic development. China needs to further exploit its economic potential, so as to better realize the social development goals of this year, and make a good start to the 14th Five-Year Plan (2021-25) period.