“China’s services industries grew at the fastest pace since August as gains in retailing and construction aid government efforts to drive a recovery in the world’s second-biggest economy.
The non-manufacturing Purchasing Managers’ Index rose to 56.2 in January from 56.1 in December, the Beijing-based National Bureau of Statistics and China Federation of Logistics & Purchasing said in a statement yesterday. A reading above 50 indicates expansion.
The Shanghai Composite Index rose, extending gains after last week posting the biggest weekly rally since October 2011 on optimism that China can sustain its expansion, with new home prices rising in January by the most in two years. Strength in services may assist a shift to a consumption-driven economy as the government targets more sustainable growth and factory output contributes to record pollution.
“A mild growth rebound appears on track,” said Ding Shuang, senior China economist with Citigroup Inc. in Hong Kong. “With downside risks to growth significantly reduced and inflation expectations rising, policies may shift away from an easing bias to a more neutral position.”
The Shanghai stock gauge rose 0.4 percent as of 10:12 a.m. local time. The MSCI Asia Pacific Index of shares gained 0.7 percent as of 11:11 a.m. in Tokyo.
Ding estimates consumer-price gains will pick up to 3.5 percent by the end of the year from 2.5 percent in December while economic expansion in the first half will accelerate to more than 8 percent due to the impact of last year’s government policies to support investment and infrastructure spending.
