Daily Times

China’s sprawling services sector maintained a solid pace of expansion in January even though growth moderated slightly, a private survey showed on Sunday, offering continued support for the world’s second-largest economy as manufacturing cools. The Caixin/Markit services purchasing managers’ index (PMI) fell slightly to 53.6 in January from 53.9 in December, but well above the 50.0 mark separating growth from contraction. Overseas sales continued to support the sector, with new export business rising at the fastest clip in more than a year, thanks to efforts among Chinese services firms to attract foreign clients. Overall new orders also ticked higher, to 52.6 from 52.3 in December. The resilience of the services sector, which accounts for more than half of China’s gross domestic product, is key to countering the ongoing slowdown in manufacturing. Chinese factories have been hit by a long-term restructuring of industries, a crackdown on pollution and China’s trade tensions with the United States.

“Overall, China’s economic growth was weighed on by weakening domestic demand in January, although exports improved marginally as the Sino-US trade negotiations flagged signs of progress,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group.

Published in Daily Times, February 4^th 2019.