(Feb 4): China’s services activity picked up after growing at a slower rate for four straight months, a private survey showed, suggesting that pockets of the economy are seeing renewed momentum despite a rocky start to the year.
The RatingDog China services purchasing managers’ index rose to 52.3 in January from 52 in the prior month, according to a statement published Wednesday. The median forecast of economists surveyed by Bloomberg was for no change from December, with any reading above 50 indicating an expansion.
The data contrasts with a picture of an economy that got off to a wobbly start to 2026, with official PMI gauges of manufacturing, construction and services all signalling a contraction in January. With trade tensions still rife, China is looking to build up its consumer sector into a key engine of growth by bolstering incomes and domestic demand.
But slumping housing prices and a weak jobs market are holding back consumption. The International Monetary Fund has previously called services “an underutilised driver” of China’s growth that contributes far less to its value-added than the advanced economy average of about 75%.
Even so, service industries from restaurants to tourism and entertainment stood out for their resilience when the rest of the consumer economy largely stagnated and shoppers became thriftier. Retail sales in services grew 5.5% last year, compared with a 3.8% gain for goods sales.
Recent surveys by the People’s Bank of China found that households are increasingly willing to spend on services, selecting education, health care and travel as the top three areas where they planned to increase purchases in the next three months.
See also: Treasuries decline on news Chinese banks asked to limit US bonds
While economic momentum has weakened, policymakers have shown few signs of moving to unleash major stimulus as they continue to battle risks tied to local government debt.
Beijing may even reduce the national goal for the economy for the first time in four years. President Xi Jinping has already signalled a greater tolerance for slower growth in some regions.
Uploaded by Chng Shear Lane
