(Xinhua)
Updated: 2008-03-21 17:11

A survey of confidence among China's banks, conducted by the People's Bank of China (PBOC), found that 63.9 percent believed the economy would continue growing rapidly without overheating in the second quarter.

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"The Chinese economy will continue expanding, but overheated growth won't occur in the ensuing months this year," Ou Minggang, deputy editor-in-chief of Chinese Banker magazine, told Xinhua on Friday.

The survey, which covered bankers from 2,850 institutions nationwide, was released on Thursday. It found that only 4.1 percent of the bankers believed the economy would overheat in the second quarter, according to the central bank.

The index of bankers' confidence rose to 28.1 percent for the first quarter of 2008 from 24.1 percent in the fourth quarter of 2007, but it was less than half the 60.6-percent level in the first quarter of 2007. The PBOC said that most bankers had concerns over industrial conditions.

The survey found that 62.4 percent of the bankers said that monetary policy was "tight" -- an all-time high and 8.4 points higher than in the last quarter.

"This reveals that the government's tight monetary policy has shown its effect in practice and on bankers' psychology. The uncertainty over the global economy has also affected Chinese bankers' confidence," said Ou.

He added that it had become more difficult for enterprises to get loans, which also reduced some bankers' outloook for their banks' growth potential and profitability.

The PBOC on March 18 raised the bank reserve ratio by 50 basis points, effective March 25, the second rise this year. The ratio was raised in line with tight monetary policy and was intended to lead to rational credit growth.

This effort dampened -- at least temporarily -- expectations that the PBOC would further raise interest rates to cool economic growth.

China's inflation rate has continued to accelerate, meanwhile, with the consumer price index up 8.7 percent year-on-year in February, the biggest jump in nearly 12 years.

A 50-city quarterly survey by the PBOC, also released on Thursday, found that in the first quarter, 49.2 percent of the 20,000 respondents said prices had become intolerable.