The Caixin China General Services purchasing managers’ index rose to 52.1 in July from 51.2 in June — China Daily
SHANGHAI: China’s business activity recovered further in July, with the services sector expanding at an accelerated pace due to improvements in both demand and supply, according to a private survey report.
As challenges and uncertainties remain, expanding domestic demand, particularly by spurring consumer sentiments and improving the offering of consumer goods and services, should be among the top priorities for policymakers, in order to strengthen the world’s second-largest economy in the coming months, experts said.
The Caixin China General Services purchasing managers’ index (PMI) rose to 52.1 in July from 51.2 in June, according to the report released on Monday by media group Caixin.
The figure, which is above the 50-point mark that separates growth from contraction, remained in expansionary territory for the 19th consecutive month.
Citing the Caixin manufacturing PMI for last month, which fell to 49.8 in July from 51.8 in June, the report noted that services activity growth was offset by a slower and only marginal rise in manufacturing production, with the Caixin composite PMI, which includes activity in both sectors, posting 51.2 in July against 52.8 in June.
“The services sector saw improvement, while manufacturing faced greater pressure.
“The former outperformed the latter in terms of supply, demand and employment,” said Wang Zhe, senior economist at Caixin Insight Group.
“Regarding market expectations, optimism improved compared to June, although the corresponding gauge remained at a low level.”
As China’s gross domestic product growth in the second quarter slowed to 4.7% year-on-year, after 5.3% in the first quarter, Wang said it will be “challenging” for the country to meet its annual growth target of around 5%.
“The most prominent issues include the still-weak domestic demand and low market optimism.
“Therefore, policy efforts should focus on stabilising growth, improving employment, safeguarding people’s livelihoods, intensifying policy stimulus, ensuring effective implementation of previous policies, and unleashing market vitality,” he said.
In its latest efforts to spur domestic demand, China announced a plan to boost consumption by expanding an opening-up in the services sector, improving the supply of services and fostering new services consumption scenarios.
Last Saturday, the State Council, China’s cabinet, issued a 20-point guideline aimed at tapping the consumption potential, boosting new types of consumption, and strengthening the growth momentum in services spanning hospitality, elderly care, nursery services, entertainment, tourism, sports and education.
Among exports, investment and consumption, the traditional “troika” powering China’s economic development, spurring consumption will be the key driving force boosting China’s economic growth, said Chen Wenling, chief economist at the Beijing-based China Center for International Economic Exchanges.
A research report, titled Decisive Battle: The Progress of China’s Comprehensively Deepening Reform and High-Standard Opening-Up in the New Era and Prospects for 2029 and 2035, was released during the symposium. — China Daily/ANN
