The confidence index of China's entrepreneurs rose 6.3 points in the first quarter from the same period last year, reflecting optimism in the national economy.

　　The benchmark index tracking domestic company managers' confidence in the economy hit 138.8 points, "the highest level in recent years," the National Bureau of Statistics said in its report yesterday.

　　Manufacturers of steel and cement were among those who were the most optimistic about their future, despite the government's decision to rein in investments in the overheated sectors this year.

　　"The probability of ensuring profits is a major source of the entrepreneurs' business confidence," said Pan Chunhui, a Haitong Securities' analyst. "Booming sales in automobiles and apartments, which consume major quantities of steel and cement, pushed up the investment sentiment."

　　Despite government warning that the raw material providers would suffer from oversupply this year, investment in the sectors is unlikely to cool down in the near future. This is because of the continuous price hikes in the raw materials due to booming demand.

　　The number of steel companies more than doubled to 280 from 114 at the beginning of the 1980s. But 200 of them have annual production capacity of less than 100,000 tons. The nation produced 220 million tons of steel in 2003.

　　The producer price of steel rose 36.7 percent in February from the same period in 2003.

　　The central government has made clear its intention to curb investment in the steel, aluminum and cement industries.

　　China consumed 55 percent of the world's cement production and 36 percent of its steel last year. In 2004, the nation will produce over 270 million metric tons of steel as economic growth of over 7 percent spurs domestic demand, according to the Ministry of Commerce.

　　Also yesterday, the statistics bureau reported that China's business sentiment index rose 4.7 points to 135.9 points.

　　The increase indicated that domestic firms are improving their ability to make profits, according to the bureau.