March 21, 2014 / 10:41 AM / in 4 years

UPDATE 1-China Q1 business confidence dips - survey

(Adds details)

BEIJING, March 21 (Reuters) - Business confidence in China cooled in the first quarter compared to the same time last year, a central bank survey showed on Friday, another indication that the Chinese economy is faltering.

The People’s Bank of China said the index measuring business confidence among entrepreneurs in the first quarter dropped to 67 percent, down 1 percentage point from the same time last year.

The survey also showed a growing number of Chinese banks are feeling the drag from China’s slowing economy.

About 31 percent of bankers polled thought the economic climate is “relatively cool” in the first quarter, up 4.5 percentage points from the fourth quarter last year, the central bank said.

Official data showed China’s economy slowed markedly in the first two months of the year, with growth in investment, retail sales and factory output all falling to multi-year lows.

Premier Li Keqiang said on Wednesday that China will speed up investment and construction plans to ensure domestic demand expands at a stable rate - an indication authorities are considering practical measures to support slackening economic growth.

The central bank polls bankers, households and firms separately every quarter for their views on the economy, inflation, home prices and other subjects.

The latest survey showed loan demand increased about 4 percentage points to 78 percent.

It also showed fewer bankers believed that the present monetary policy stance is appropriate - down 7.1 percentage points at 66 percent compared to the previous three months.

Among households, inflation expectations fell to 63.9 percent, down 8.3 percentage points from the previous three months.

Some 64.3 percent of respondents felt current home prices are “unacceptably high,” down 2.2 percentage points from the last survey.

Meanwhile, 15 percent of households planned to buy homes in the next three months, up 1.8 percentage points from the previous months.

China’s home price inflation slowed to a six-month low in February, the latest sign of cooling in the country’s frothy property market as government restrictions on purchases crimp demand. (Reporting by Xiaoyi Shao and Kevin Yao; Editing by Richard Borsuk & Kim Coghill)

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