Service indusry Photo:VCG

The Caixin Services Purchasing Manager's Index (PMI), a private survey that gauges China's services sector activity, rebounded in December ending at 53.1, up 1 percentage point from November and in expansionary territory for the fourth consecutive month, data released by Caixin showed on Thursday.

And China's Caixin Manufacturing PMI in December rebounded back into expansion territory standing at 50.9, beating market expectations of 50.0 and rebounding from last month's 49.9, showing that both manufacturing and business activity is improving.

The boom in both sectors rebounded, driving the Caixin China Composite PMI back up 1.8 percentage points to 53 for the month.

Wang Zhe, a senior economist from Caixin, said that the manufacturing and services industry recovered in December, with improved supply and demand as well as easing inflationary pressure, while noting that the employment market remains under pressure with weakened business optimism due to recurring flare-ups of COVID-19 in some regions of the country.

The data showed that in December, the new orders index was in expansionary territory for a fourth consecutive month, mainly due to the stronger demand, launch of new products and an increase in new customers. 

Compared to the slight rebound in domestic demand, external demand in the services sector remained stable. The index of new export business showed that the volume of new business from overseas markets continued to grow at a similar level compared with previous two months.

In December, the employment index of the sector was in expansionary territory for the fourth consecutive month as the market recovered, recording its highest figure since June 2021 due to the expansion of employment scale and companies' efforts to boost capacity.

However, the employment index was lower than the index of business activities and new orders, resulting in the backlog index reaching a new high since March 2020. Some companies also said that the recent flare-up of COVID-19 affected their processing capacity.

Wang noted that in the future, government should focus on improving employment and strengthen targeted support for small and medium-sized enterprises with predictable monetary and fiscal policies, in a bid to help address domestic employment pressure.

Global Times