For over a decade China has recorded an entrepreneur confidence index. In the first quarter of 2010 the index came in at 135.5. Not only is this a large increase from the previous quarter’s reading of 127.7, but is close to the index’s peak of 143.1 in June 2007.
The index has remained high for a number of readings now. Once sentiment indicators reach extreme levels for a sustained period they are often good contrary indicators. This index has certainly been a good indicator in the past. Thus, this index does suggest that a significant top in China could be reached within the coming weeks/months (rather than quarters).
The chart below illustrates the history of the index since it opened in 1999.