China’s services activity rises fastest in 4 years

Updated 2018-01-05 10:31:06

New businesses gave a boost to China's services activity which expanded in December by the quickest momentum in four years, a private report showed yesterday.

The Caixin China General Service PMI rose to 53.9 at the end of the year from 51.9 in November, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.

It said the growth in services activity was due to a greater volume of new business.

The PMI showed services companies posted the strongest upturn in new orders since May 2015 as around 14 percent of monitored companies noted an increase.

Services companies continued to increase their payroll numbers at the end of the year amid reports of rising business requirements.

Released on Wednesday, the Caixin manufacturing PMI rose to a four-month high of 51.5 for December from November's 50.8 to confirm steady economic growth in 2017.

"The December readings of the Caixin PMI surveys point to improving economic sentiment," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group. "Expansion in total new orders and new export business revealed that manufacturers and service providers are optimistic over the business outlook for 2018."

Meanwhile, the official non-manufacturing PMI released last week edged up to 55 for December from 54.8 in November.

The official non-manufacturing PMI survey covers 4,000 large and small companies, while the Caixin service PMI measures over 400.

The services sector contributed to more than half of China's gross domestic product in recent years as the country is in the midst of transforming its economy from investment-driven to consumption-driven.

The Bank of Communications wrote in a report yesterday that China's GDP may have grown 6.8 percent in 2017, above the government target of 6.5 percent.

The bank's economists expect GDP this year to dip to 6.7 percent, with growth of tertiary industries continuing to outpace the industrial sector.

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