The business climate index, which measures companies' performance, reached 131.2 points, an increase of 11.6 points compared with the same period last year.

"This suggested that Chinese companies became more vigorous and the micro foundation of China's economic development improved," the bureau said.

Companies in the information transmission, computer services and software sectors were the best performers, it said.

Companies' business performance will continue to improve in the second quarter, with the business climate index expected to reach 133 points, the bureau said.

Wang Zhao, a researcher at the Development Research Center under the State Council, said the companies' good performance was a result of the country's implementation of a proactive fiscal policy and a sound monetary policy.

Zhang Xueying, a senior economist with the State Information Center, agreed, adding the good performance was a clear indication that healthy development is the hallmark of the Chinese economy.

"The trend will continue in the coming months, propelled by strong demand from both home and abroad," he said.

The statistics bureau revealed earlier that industrial enterprises' profits rose year-on-year by 120 per cent to 98 billion yuan (US$11.8 billion) during the first two months of this year.

Profits of State-owned industrial firms and firms in which the State is the majority shareholder stood at 55 billion yuan (US$6.6 billion) during these two months, a year-on-year increase of 200 percent.

(China Daily April 4, 2003)