(Yicai) Sept. 6 -- Confidence in China’s economy rose for the second month in a row as the government’s economic support policies take effect, according to chief economists surveyed by Yicai Global.

The Yicai Chief Economists Confidence Index rose to 50.69 in September from 50.46 in August, when it increased for the first time since March, the poll of leading economists in China showed yesterday. A reading above 50 indicates positive sentiment.

July’s meeting of China’s top leadership outlined the requirements for achieving the country’s economic and social development goals this year, said Ding Anhua, chief economist at China Merchants Bank.

The government has brought out many support policies since last month, so its economic work will focus on maintaining 5 percent annual growth in China’s gross domestic product, and policies will center on lifting domestic demand amid weak external demand, Ding noted. 

The surveyed economists expect the consumer price index to have edged up 0.1 percent last month from a year earlier, compared with a 0.3 percent dip in July. The producer price index likely fell 2.9 percent versus a 4.4 percent decline in July.

August’s retail sales of consumer goods likely rose 4 percent from a year earlier, up from 2.5 percent the month before, according to the survey’s findings. Industrial value added may have climbed 4 percent, up from 3.7 percent in July.

Fixed asset investment probably rose 3.5 percent last month, while investment in real estate development may have fallen 8.52 percent, versus an 8.5 percent drop a month earlier.

Production and operation activities in the manufacturing purchasing managers' index likely increased to 55.6 percent last month from 55.1 percent, the survey showed.

China's foreign trade has been weak this year. Imports in the US dollar last month likely tumbled 8.4 percent, versus a 12.4 percent decline in July. In US dollar terms, exports probably tumbled 9.1 percent compared with a 14.5 percent plunge the prior month, which was the steepest decline since February 2020.

The economists predicted that new loans rose to CNY1.2 trillion (USD164.2 billion) in August from CNY345.9 billion (USD47.4 billion) in July, while social financing soared to CNY2.53 trillion from CNY530 billion, and the average growth rate of M2, a broad measure of money supply that covers cash in circulation and all deposits, likely edged up 0.2 point to 10.9 percent.

The economists were unanimous that changes in the benchmark deposit and loan prime rates are less likely this month.

The Chinese yuan will likely appreciate to 7.06 by the end of the year, the economists noted, adding that it will be stable versus the US dollar this month, probably trading at 7.2 at the end of this month. The yuan’s central parity rate against the dollar was 7.1783 yesterday.

Editor: Martin Kadiev