China's services expansion shows resilience
Despite robust activity in the key sector, analysts warn that the economy still faces risks to growth from a prolonged property market slowdown
The mainland's service sector activity showed resilience even as expansion in its vast factory sector slowed, in the latest sign that the government-engineered transition from a manufacturing-driven economy to one led by services is taking hold.
Both the official mainland non-manufacturing purchasing managers index (PMI) and a private survey conducted by HSBC and Markit showed that activity in the services sector picked up in August.
The official index rebounded to 54.4 last month from 54.2 in July, which had been the lowest since the start of this year, the National Bureau of Statistics said yesterday.
The HSBC China Services PMI rose to 52.8 in August from 51.6 in the previous month in the strongest expansion of business activity in 17 months.
The robust activity in the services sector contrasts with the slowing expansion of the manufacturing industry. Data released on Monday showed HSBC China manufacturing PMI fell to 50.2 in August from 51.7 in July, while the official reading also eased, though both held above the threshold of 50, a border separating expansion and contraction.
HSBC's chief China economist Qu Hongbin said despite the rebound in the services PMI last month, sub-indices "suggested a mixed picture rather than a broad-based improvement".