BusinessWeek: “The latest less-than-encouraging news from China’s economy: Service-sector companies are seeing lackluster business, according to two separate surveys released July 3. That follows disappointing news showing China’s manufacturing growth is also slowing, announced just days earlier.
A government survey by China’s National Bureau of Statistics and Federation of Logistics and Purchasing of 1,200 nonmanufacturing companies in 27 industries, including retail, catering, construction, and transportation, showed business activity losing steam, with a reading of 53.9 in June, down from 54.3 the previous month (a reading above 50 shows expansion). A separate private survey conducted by HSBC and Markit Economics, covering 400 private service-sector companies, showed business basically unchanged, at 51.3 in June, compared with 51.2 the month before.
“The underlying growth momentum is likely to be softening for services sectors, along with the slowdown of manufacturing growth,” warned Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC (HSBA:LN), in a statement released July 3.
This is not good news for China’s new leaders, who have recently reiterated a national goal of economic rebalancing. That means moving from an emphasis on investment to one more reliant on consumption, with a crucial need for a bigger, stronger service economy. China’s service sector, now at 44.6 percent of the economy, is up 2.7 percentage points from 12 months ago. Still, that’s well below the 60 percent of GDP common in most developed countries, reported China’s official Xinhua News Agency on May 29.”
via Growth of China’s Service Sector Slows – Businessweek.
See also: https://chindia-alert.org/economic-factors/china-needs-to-rebalance-her-economy/
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