More bankers think economy cooling in Q2

Demand for loans weak, PBC survey reveals

More Chinese bankers now believe the economy is cooling in the second quarter than earlier in the year and demand for loans has weakened, according to a central bank survey published on Wednesday.

The survey also showed that in the second quarter, the number of bankers who believed monetary policy was appropriate increased from the first three months of the year.

Business confidence in China cooled in the second quarter compared with the first quarter, according to the People's Bank of China (PBC).

PBC, China's central bank, has taken targeted measures to support the economy, including cutting reserve requirements for selected banks. The government has unveiled a host of steps - dubbed a "mini-stimulus program" by some economists - to boost activity in certain sectors.

A Reuters poll in April forecast that China's annual economic growth pace could slow to 7.3 percent in the second quarter from an 18-month low of 7.4 percent in January-March, with full-year growth of 7.3 percent in 2014, the weakest in 24 years.

Recent data reinforced market expectations that the world's second-largest economy is powering through its recent soft patch, even if the recovery may be patchy.

About 47 percent of bankers polled thought the economic climate is "relatively cool" in the second quarter, up 16.3 percentage points from the first quarter, the central bank said.

It also showed more bankers believed that the current monetary policy stance is appropriate - up 5.8 percentage points to 72 percent, compared with the previous three months.

The central bank polls bankers, households and business people separately every quarter for their views on the economy, inflation, home prices and other subjects.

The confidence index of entrepreneurs in the second quarter fell to 64.9 percent, 2.1 percentage points lower than the first quarter, the survey showed.

The PBC said that, based on the survey, slightly fewer Chinese residents believe property prices are at unacceptable levels, as home prices are showing signs of cooling.

The survey also showed inflation expectations among Chinese residents held steady in the second quarter.