Business Sentiment Index (BSI)

The CKGSB Business Sentiment Index Chart


1. Diffusion Index (DI) is computed using the percentage of firms that answer “increase” (% increase) and “same” (% same) according to the formula: (% increase + 0.5 * % same). The index ranges between 0 and 100. A larger value indicates a better operating condition.

2. Business Sentiment Index is the average of DIs for Operating Conditions, Expected Operating Conditions and Good Timing for Investment.

About the CKGSB Business Sentiment Index

CKGSB’s Center on Finance and Economic Growth surveys more than 2,000 Chinese companies from within the industrial sector every quarter to provide the most comprehensive set of independent data currently available. Led by CKGSB Professor of Finance Gan Jie, this large-scale, micro-level quarterly company survey on China’s industrial economy, which began in 2014 Q2, sheds light on how the sector is coping and what types of reforms are needed—based not on opinion, but on a painstaking, fact-gathering process.

Described as the first of its kind, Professor Gan’s survey is based on stratified random sampling by industry, region and size from the National Bureau of Statistics’ population of 488,000 industrial firms that have sales of over five million RMB. The survey has around 2,000 responding firms each time.

Each quarter, Professor Gan reveals her survey findings, which are often surprising, given the usual themes found in the media today. She then outlines some policy recommendations which are necessary to deal with the problems exposed by the survey’s data.

Latest survey results

The key findings from Professor Gan Jie’s 2020 Q4 report are as follows:

The Business Sentiment Index (BSI) stood at 50, except for a slight contraction in Q1, the business sentiment remained flat in the last three quarters. Domestic orders showed a slight expansion while foreign orders shrank. The proportion of firms with expansionary investment dropped from 2% in 2019 Q4 to 1%. Weak demand continued to pose the biggest challenge for the industrial economy Cost rises became more prominent in 2020 Q4. The proportion of firms without any R&D spending increased significantly from 65% in 2019 to 80% in 2020. Moreover, none of firms reported R&D spending over 5% of sales.

When asked about confidence about economic outlook over the next 3-5 years, half of the firms (68%) were either “optimistic” (5%) or “cautiously optimistic” (63%). Sentiment towards China’s legal institutions have improved. When asked, “On a scale of 0-10, what is the likelihood that the legal system will uphold your contract and property rights in business disputes (0 being the worst)?”, the firms’ average rating of the legal environment increased from 7.7 in 2019 to 8.4 in 2020.

The full survey can be downloaded via the links below (Chinese version available here).

For more information, or to arrange an interview with Professor Gan, please email

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