Business confidence in Asia rose to a three-year high in the second quarter of the year, propelled by a slew of favorable economic data across the region and easing concerns over the health of the Chinese economy, a Thomson Reuters/INSEAD survey showed, although sentiment in Taiwan weakened.
The Thomson Reuters/INSEAD Asian Business Sentiment Index, representing the six-month outlook of 101 firms, climbed to 74 in the April-to-June period from 70 three months earlier.
A reading above 50 indicates a positive view.
“The world economy is starting to look more solid,” said Antonio Fatas, a Singapore-based professor of economics at global business school INSEAD.
“The US is reaching good levels of GDP and employment, with Europe finally recovering and Asia seeing less risks ahead,” Fatas said. “China looks like it’s in a more stable situation after having ups and downs because of capital outflows over the last couple of years, and also the risks of a debt crisis.”
China is widely expected to meet its 6.5 percent economic growth target this year without too many bumps, helped by an increase in exports, and stable growth in factory output and retail sales.
The Chinese government has also sought to reduce debt.
Reflecting the upbeat picture, the nation upon which much of Asia depends for trade scored a business sentiment subindex of 75, up from 72 three months prior.
In Japan, sentiment hit its highest-ever with a subindex of 83 compared with 61 in the previous quarter and an average of 58 in the survey’s eight-year life, while buoyant consumer confidence and export growth that exceeded initial estimates helped Indonesia’s sentiment subindex rise 8 points to 83, its highest in more than a year.
Sentiment rebounded the most in South Korea with a 50-point jump in its subindex to 75.
The result came after the nation’s new president vowed to review a decision to deploy a US antimissile system, which had angered China and prompted a boycott of South Korean goods.
Sentiment also edged upward in India and Thailand.
However, it weakened in Taiwan, Australia and the Philippines.
Singapore posted the lowest subindex of 62, but even that was the strongest lowest subindex the survey has seen since it began in 2009.
Thomson Reuters and INSEAD polled companies from June 2 to Friday last week.
Of the 101 respondents, 56 percent rated their six-month outlook as “positive,” the highest proportion in more than six years, while 37 percent were “neutral” and 7 percent were “negative.”
Firms ranked disruptive technologies as the leading risk to their six-month outlooks.
Disruptive technologies include the sharing platforms of Uber Technologies Inc and Airbnb Inc, which are increasingly taking market share from traditional industry leaders.
Other risks cited include an inconsistent US administration and protectionism.
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