China’s Services Sector Grows at Slower Pace in December
The services sector in China grew at a slower pace during December as consumer confidence took a hit due to fresh outbreaks of coronavirus across some parts of the country. The Caixin General Services PMI dipped to 56.3 in the month of December from 57.8 in November – the weakest reading seen in three months.
The growth in new business in the services sector eased significantly, with the sub-index falling from 58.7 in November to 54.3 in December. The latest wave of the coronavirus pandemic across most of China’s leading trading partners also impacted new export business, with the pace of growth slowing down since November.
Unlike China’s manufacturing sector that rebounded into growth quickly after the coronavirus outbreak was brought under control, the services sector activity took longer to return to growth. Meanwhile, fresh restrictions imposed across northern Chinese provinces to control new cases of infection brought down the services sector once again.
Senior economist at Caixin Insight Group, Wang Zhe, observes, “Overall, the epidemic’s damage to the domestic economy further receded, and the manufacturing and services sectors continued to recover. Looking ahead, we expect the post-epidemic economic recovery to continue for several months, and macroeconomic indicators will be stronger over the next six months due to the low bases in the first half of 2020.”
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