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Chinese Business Sentiment Fell Sharply in October 2008
added: 2008-10-31

Chinese business sentiment fell sharply in October, as a worsening economy at home and abroad outweighed any positive news from declining inflationary effects, the results of the latest Xinhua Finance/MNI China Business Sentiment Survey indicate.

The headline sentiment index for current business conditions in October fell to 49.06, the first time the index has been in contraction. Other indexes, including the key new orders index, also showed contractions for the first time in the almost four years of the survey's history.

An index figure above 50 indicates that the business activity is growing or improving, a figure below 50 that it is shrinking. The further the figure above or below 50, the faster the growth or contraction.

The current business conditions index was at 58.24 in September and was hitting levels around 80 as recently as early last year.

Although other indexes had showed growth slowing earlier this year, the index for new orders had been holding up fairly well until September, when it fell to 52.80 from 62.32 in August. But the index dropped to 45.16 in October, the first time it has showed a contraction.

The indexes indicating inflationary effects also declined sharply, one of the few positive indicators in an overall negative result.


Source: Xinhua Finance

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