China Economy

China’s services industries expand more slowly: HSBC

PUBLISHED : Wednesday, 05 December, 2012, 11:57am
UPDATED : Monday, 30 May, 2016, 5:01pm

China’s services industries expanded at a slower pace in November, damping hopes for a faster rebound in the economy after a seven-quarter slowdown.

The purchasing managers’ index fell to 52.1 from 53.5 in October, HSBC Holdings Plc and Markit Economics said. A reading above 50 indicates expansion. That contrasts with a government-backed gauge of services that rose to the highest level in three months in November.

The report may undermine prospects for a faster recovery in the world’s second-largest economy even as manufacturing expansion accelerates. It may increase pressure on the new leadership headed by Xi Jinping to roll out more measures to prop up growth.

“Despite the moderating growth of services activities in November, services providers hired more workers and became more optimistic,” Qu Hongbin, chief China economist for HSBC in Hong Kong, said.

China’s official non-manufacturing purchasing managers’ index rose to 55.6 in November from 55.5 in October, the National Bureau of Statistics and Federation of Logistics and Purchasing said on Monday.

The official purchasing managers’ index for manufacturing rose in November to the highest level in seven months and a private gauge complied by HSBC and Markit stood above 50 for the first time in 13 months, indicating that the economic recovery may gain traction.

China’s services industries accounted for 43.8 per cent of its economy in the first three quarters, up 1.2 percentage points from the same period last year, Sheng Laiyun, a statistics bureau spokesman, said October 18. The government is seeking to raise the ratio to 47 per cent by 2015, according to a plan issued last year.

The HSBC survey is based on data compiled from monthly replies to questionnaires sent to purchasing executives in more than 400 private services companies, according to Wednesday's statement.