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Chinese business sentiment remains mixed in March

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Chinese business sentiment remains mixed in March

Production and employment increase.

Confidence among executives at China's largest companies remained stable in March, with firms evenly split on the development of business conditions over the past month, according to the latest China Business Sentiment Survey from data producer MNI.

The MNI China Business Sentiment Indicator, a monthly gauge of current business sentiment, was unchanged at 49.9 in March. This was the second consecutive month sentiment has been just below the 50 mark. Firms remained relatively more upbeat about the coming three months, with the Future Expectations Indicator increasing further above the current measure, providing some hope that the situation may improve.

"Recent results from the survey have shown that the strains on business have increased."

The weakness in overall sentiment belied some improvement in other key metrics in the survey. Most notably, Production and New Orders both picked up in March, following a setback in February. Companies expected increased activity to continue over the next three months, with the Future Expectations Indicators for both measures regaining some ground lost in the previous month. There was also an improvement in the Employment Indicator which increased to the highest since September 2015.

The cost of credit, measured by the Interest Rates Paid Indicator, edged down notably following a rebound in February. Although the Availability of Credit Indicator eased again in March, it remained above the breakeven 50 level. Meanwhile, the expectations measures for both indicators shifted more towards an easing bias, suggesting that companies expect more policy adjustment.

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