Alternative China PMI Gauge Says Business `Has Never Been Worse'

(Bloomberg) -- An indicator produced by a Beijing-based business school in the style of the closely-watched purchasing managers index plunged last month, adding to concerns about the slowing economy and raising the question of whether business conditions may be worse than official statistics show.

The CKGSB Business Conditions Index, compiled by the Cheung Kong Graduate School of Business, dropped to the lowest level in its seven-year history in September as the U.S. and Chinese governments imposed new rounds of tariffs on each other’s exports, escalating the trade war.

The index is based on a survey of CKGSB students and graduates who are executives at companies operating in China. The respondents represent around 300 privately-owned small and mid-sized enterprises across several sectors of the economy. Over the last seven years, the CKGSB index has shown bigger swings than the official PMI gauges produced by China’s National Bureau of Statistics.

"Most surveyed companies are now experiencing unprecedented difficulties and have become increasingly pessimistic about business prospects for the next six months," Li Wei, the economics professor at CKGSB who oversees the survey, said in a commentary accompanying the September survey results. "For most, business has never been worse."

To contact Bloomberg News staff for this story: Matthew Boesler in Beijing at mboesler1@bloomberg.net

To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, James Mayger, Karl Lester M. Yap

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