SHANGHAI • Business confidence in Asia rose to a three-year-high in the second quarter of the year, propelled by a slew of favourable economic data across the region and easing concerns over the health of China's economy, a Thomson Reuters/Insead survey showed.
The Thomson Reuters/ Insead Asian Business Sentiment Index, representing the six-month outlook of 101 firms, climbed to 74 in April to June, from 70 three months earlier. A reading over 50 indicates a positive view.
"The world economy is starting to look more solid," said Singapore-based economics professor Antonio Fatas at global business school Insead.
"The United States is reaching good levels of gross domestic product and employment, with Europe finally recovering and Asia seeing fewer risks ahead.
"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 per cent economic growth target this year without too many bumps, helped by a pick-up in exports and stable growth in factory output and retail sales. The government has also sought to reduce debt.
Reflecting the upbeat picture, the country upon which much of Asia depends for trade scored a business sentiment subindex of 75, up from 72 three months prior.
In nearby 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.
The country's central bank in April offered its most optimistic assessment of the economy in nine years, saying it was turning towards expansion.
Buoyant consumer confidence and export growth that exceeded initial estimates helped Indonesia's sentiment subindex rise eight points to 83, its highest in over a year. Sentiment rebounded the most in South Korea with a 50-point jump in its subindex to 75.
The result came after the country's new president vowed to review a decision to deploy a US anti-missile system which had angered China and prompted a boycott of Korean goods.
"The cloud of political risk has disappeared," Dr Fatas said."Last quarter the data for South Korea was looking weaker. There was potential for crisis with some trading partners, in particular China."
Sentiment also edged up in India and Thailand, but weakened in Australia, Taiwan 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.