(Yicai) Oct. 14 -- China’s economic prospects improved again this month, according to the Yicai Research Institute’s monthly survey of chief economists, with strong manufacturing activity and resilient foreign trade supporting confidence.

The Yicai Chief Economist Confidence Index stood at 50.3 for October, compared with 50.1 last month, according to poll of 13 China-based chief economists. That marks the third consecutive monthly increase and the second straight month above the boom-bust line of 50.

The recovery is being led by production, while domestic demand is improving more gradually, said Cheng Shi, chief economist at Industrial and Commercial Bank of China International. The manufacturing purchasing managers’ index returned to expansion territory in September, reflecting stronger industrial momentum, he noted, adding that the willingness of households to spend and private-sector investment confidence still have much room to improve.

The manufacturing PMI rose for the second month in a row in September, climbing to 50.1 from 49.8 in August, according to data from the National Bureau of Statistics. The non-manufacturing PMI also increased to 50.2 from 49, expanding for the first time since July.

The effects of earlier economic policy measures are becoming more evident, Cheng said. Combined with robust foreign trade and growth in emerging industries, these measures are expected to help China maintain a stable economic trajectory, he added. The country remains on a relatively solid footing to achieve its full-year growth target, Cheng said.

Against this backdrop, the economists raised their average forecast for third-quarter economic growth to 4.4 percent from a year earlier, up from 4.3 percent last month, while the average forecast for the full year was 4.6 percent, above than the lower range of 4.5 percent set in the Government Work Report in March.

The consumer price index released by the NBS today rose 0.9 percent in September, compared with a 1 percent increase predicted by the chief economists. The producer price index climbed 5 percent, versus a forecast of 4.5 percent.

Industrial production likely expanded 5.6 percent last month from the same period last year, while retail sales of consumer goods probably rose 0.7 percent, according to the economists. Both indicators are expected to be higher than the official figures the month before. The NBS will release figures for September’s industrial production and retail sales on Oct. 19.

The economists forecast fixed asset investment to have plunged 7.3 percent in the first nine months of the year from a year earlier, wider than the 7.2 percent decline in the first eight months. The NBS is also due to publish that data on Oct. 19.

China’s imports and exports beat expectations in September, up 31 percent and 36.3 percent, respectively, from a year ago, according to the NBS. The economists had projected a 25.6 percent boost for exports, accelerating from 25 percent in August, and a 25.6 percent gain for imports, moderating from 28.2 percent growth the month before.

As a result, the nation’s trade surplus was projected to have narrowed to USD110.1 billion from USD119.1 billion. It actually came in at USD133.5 billion.

New loans probably soared to CNY958.4 billion (USD143.2 billion) last month from CNY60 billion (USD9 billion) the previous month, and new social financing possibly jumped to CNY3.3 trillion (USD493 billion) from CNY1.7 trillion, the economists said. The official figures will come out tomorrow.

Editors: Dou Shicong, Futura Costaglione