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China’s services sector improves in November, surveys show

By Wang Yanlin | December 3, 2014, Wednesday | Online Edition

CHINA'S services activity improved slightly in November, data showed today, sending an upside surprise when the world's second-largest economy continued to show signs of slowdown.

The official non-manufacturing Purchasing Managers' Index, a gauge of operating conditions of the service sector weighing toward state-owned companies, was up 0.1 points from a month earlier to 53.9 in November, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing. A reading above 50 means expansion.

Meanwhile, the HSBC China Services Business Activity Index, a similar gauge for private service companies, also strengthened 0.1 points from October to 53 last month, according to HSBC Holdings plc and research firm Markit.

Qu Hongbin, chief economist for China at HSBC, said despite the improvement, the service sector saw a very marginal growth in November, alongside sluggish activity in the manufacturing sector.

"We expect the central bank's recent rate cuts will help to stabilize demand in the near term," Qu said. "However, downside pressures on the economy still persist and warrant further monetary and fiscal easing measures in the coming months."

China's gross domestic product grew 7.3 percent from a year earlier in the third quarter, the slowest pace in more than five years led by corrections in the property sector.

To support growth, the People's Bank of China last month lowered the benchmark interest rate for one-year deposits by 25 basis points and slashed the one-year lending rate by 40 basis points – the first such move since July 2012.

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