(Yicai) July 11 -- Investors in Shanghai were less confident in the Chinese city’s economic outlook in the second quarter of the year.

The Shanghai Investor Confidence Index came in at 102.61 points in the three months ended June 30, down 1.34 from the previous quarter and 0.64 points from a year earlier, according to the results of a survey carried out by the Shanghai University of Finance and Economics and its Shanghai Social Survey Research Center. A mark above 100 indicates optimism.

Meanwhile, the Shanghai Consumer Confidence Index showed an opposite trend. In the second quarter, it rose 7.5 points from the first quarter but fell 10 points from the same period last year to 112.3 points.

The effect of recent growth stabilization policies needs to be improved because domestic demand remains weak, said Xu Guoxiang and Chang Ning, professors at the SUFE.

Both institutional and individual investors are not as optimistic about investment conditions as before because the intensified economic and trade frictions between China and the United States and Europe brought economic uncertainties, and the delay in US interest rate cuts slowed down investment in the Chinese mainland capital market and intensified investment risks, Xu and Chang noted.

The Shanghai Entrepreneurs’ Investment Confidence Index, which reflects entrepreneurs’ satisfaction with enterprise production and operation and their future expectations, came in at 102.73 points in the second quarter, down 8.15 points from the previous quarter and 0.71 points from a year earlier.

In the second quarter, China’s infrastructure investment slowed down as the real estate market was still adjusting, and the manufacturing purchasing managers’ index remained below the threshold, indicating that the recovery trend of the economic fundamentals is still unstable, Xu and Chang pointed out.

Moreover, prices of upstream raw materials remained high, and the imbalance between supply and demand was still severe, they added. Trade frictions and regional conflicts also brought uncertainty and risks, so entrepreneurs have become more cautious about investment.

To boost the confidence of Shanghai investors in the third quarter, the city should focus on implementing large-scale equipment renewal projects, speeding up consumer goods trade-in, enhancing fiscal, financial, and investment policies, improving the market efficiency and transparency of capital market reforms, promoting the high-level opening-up of the financial sector, and making it more convenient for foreign investors to participate in the Chinese capital market, Xu said.

Editor: Futura Costaglione