Chinese Small Business Sentiment Shows Signs of Improvement

Business conditions at some of China’s smaller companies showed signs of improvement in January as the economy gradually rebounds from Covid Zero-induced damage.

(Bloomberg) — Business conditions at some of China’s smaller companies showed signs of improvement in January as the economy gradually rebounds from Covid Zero-induced damage. 

The CKGSB Business Conditions Index – a gauge measuring sales, profits, the financing environment and inventory at private small businesses in China, rose to 49.7 in January from December’s 45.2, data provider Cheung Kong Graduate School of Business said in a release Thursday. The survey uses the same methodology as the PMI index, meaning a reading above 50 indicates expansion and one below 50 suggests contraction from the previous month.

Three of the four major sub-indexes – corporate sales, profit and financing – improved in the month, while inventory declined. “The BCI is on the rise and is now pushing at the confidence threshold of 50.0, which is something to celebrate,” the school wrote in the release. 

Looking at the outlook for the next six months, the surveyed businesses expected overall costs to rise, while the prospects for investment and recruitment are still well down on the levels seen in 2021, but are in expansionary territory.

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