(Yicai) Nov. 6 -- A gauge of confidence in China’s economy rose further above the boom-bust line for the second straight month in November, as economists polled by Yicai expressed the opinion that the ongoing roll-out of countercyclical measures will support the upward momentum and boost expectations.

The Yicai Chief Economists Confidence Index scored 50.78 this month, up from 50.62 in October, according to a survey of 12 leading China-based economists published by Yicai yesterday. A reading above 50 indicates optimism.

To address upcoming challenges, China’s government has introduced a major stimulus package since late September, aiming to strengthen countercyclical adjustments, boost effective domestic demand, support businesses, buoy the real estate market, and energize the capital markets.

China should adhere to a “self-centered” approach, continue to promote reform and innovation, and actively respond to challenges, the economists indicated.

Regardless of the outcome of the US presidential election, US restrictions on Chinese businesses will not ease and uncertainties in China-US trade will increase, they noted.

The consumer price index, a measure of inflation, is likely to have climbed 0.42 percent in October from a year aearlier, while the producer price index, a gauge of industrial profits, is expected to have fallen 2.42 percent, according to the average forecast made by the economists. Consumer goods sales probably rose 4.1 percent. These predictions are all up on September’s official data.

Fixed asset investment likely grew 3.39 percent and industrial value-added probably expanded 5.33 percent, the economists indicated. Both of these figures are in line with September’s official data. But the chief economists expect China’s trade surplus to have been around USD72.6 billion, a drop of 11 percent from September.

October’s financial data is likely to have declined, due to seasonal factors, the economists said. They forecast new loans for the month to come in at CNY808.8 billion (USD113.2 billion), and social financing to reach CNY1.6 trillion (USD226.7 billion). M2 broad money supply is expected to climb 6.84 percent year on year, slightly higher than September’s 6.8 percent jump.

The benchmark loan prime rate is unlikely to be lowered further this month, the indicated, but monetary policy will remain fairly loose for the rest of the year.

The central parity rate of the Chinese yuan to US dollar, which was 7.125 on Oct. 31, will probably continue to fluctuate both ways in November and should strengthen to 7.09 by month-end, according to the surveys’ findings.

The chief economists revised their year-end forecast for the yuan to 7.07 versus the dollar from the 6.95 they predicted at the end of last month.

Editor: Kim Taylor