“China’s services industries’ growth slowed in December, a private survey showed, even as a pickup in new business added to the likelihood that the economy accelerated for the first time in eight quarters.
The services Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics today was at 51.7 after 52.1 in November. Companies added workers at the fastest pace in more than two years and were “optimistic” business would improve, HSBC said in a statement.
“Despite the moderation of December’s headline services PMI, the underlying strength of services sectors improved in terms of stronger new business flows and employment growth,”Qu Hongbin, chief China economist at HSBC in Hong Kong, said in the statement. “This, plus the further pickup of manufacturing growth, suggests that China is on track” to report fourth- quarter economic growth of about 8 percent, he said.
China’s new leadership, headed by Xi Jinping, is targeting “sustained and healthy development” of an economy that may have expanded last year at the weakest rate since 1999. The government cut taxes for smaller companies and low-income households, accelerated investment approvals and boosted infrastructure spending to support growth amid a slump in exports.
The benchmark Shanghai Composite Index (SHCOMP) rose 0.6 percent as of 2:11 p.m. local time after advancing as much as 1.2 percent. The gauge had gained 16 percent through Dec. 31 since falling to a 2012 low on Dec. 3. Chinese stock markets were closed Jan. 1-3 for the New Year holiday.”
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