Activity in private firms, SOEs differs
Print Edition
SERVICE activity in private companies in China grew more slowly in May, in contrast to their state-owned counterparts whose activity rose to a six-month high, a survey showed yesterday.
The HSBC China Services Business Activity Index, a gauge of operating conditions in private service companies, posted 50.7 last month, down from 51.4 in April, according to HSBC Holdings Plc and consulting firm Markit.
A reading above 50 means expansion.
However, the official non-manufacturing Purchasing Managers’ Index, compiled by the China Federation of Logistics and Purchasing which weighs toward state-owned enterprises, jumped to a six-month high of 55.5 last month.
Qu Hongbin, chief economist for China at HSBC, said the HSBC index eased because business expectations dropped sharply to an 11-month low of 58.1.
“Coming after the stronger manufacturing PMI reading for May, the slight disappointment in the HSBC services index suggests that the growth momentum has slowed and the private sector sentiment is weak,” Qu said.
The earlier data showed China’s manufacturing sector performed better over the past month, fueling hopes of a stabilizing economy.
China has unveiled a mini stimulus, including lower reserve requirement for rural banks and faster investment in railway construction, since April to bolster growth, which slid to an 18-month low of 7.4 percent in the first quarter.
Qu suggested policy-makers should continue to ease monetary and fiscal policies in coming months.
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