While both current conditions and expectations indices were below levels seen in the first half the year, this is largely explained by the sharp rise in the number of respondents moving from reporting improving conditions to reporting no change. The number reporting a deterioration in either current conditions or future expectations remained very small.
Price pressures were a major theme in the August results, underscoring pressures that the Chinese government faces in keeping inflation under control.
The monthly survey of 148 companies was conducted August 9-28 and comes amid rising interest rates and other measures imposed by the government to slow what some say is an overheating economy.
Since its inception in January, 2005, the survey has accurately tracked and predicted overall Chinese economic conditions, providing important intelligence ahead of government data. The survey has been especially important in indicating turnarounds in the economy, such as last summer's slowdown or the pickup in activity seen since last fall.
