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BEIJING (MNI) - The Chinese services sector expanded in November at the
strongest pace since September, but remained weak by historical standards,
according to the latest survey of purchasing managers jointly released by Caixin
magazine and Markit.
The headline index rose to 51.9 in November from 51.2 in October, the
second consecutive rise.
Readings above 50 indicate expansion in the services sector, and readings
below 50 indicate contraction. The higher the PMI reading above 50, the faster
the expansion in the sector.
"The [November] reading showed the economy has maintained stability and
there was no imminent risk of a significant decline in its growth rate," Zhong
Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of
Caixin, said in the release.
The rise in the Caixin services index was in line with with the pickup in
the official services PMI jointly released Nov. 30 by the China Federation of
Logistics and Purchasing (CFLP) and the National Bureau of Statistics (NBS). The
CFLP services PMI rose to 54.8 from October's 54.3 reading.
Growth in the Caixin services PMI was attributed to robust new business and
rising input and output prices.
"Services companies signalled a sustained rise in new work during
November," Caixin said. The index increased to three-month high as service
firms' success in attracting new clients and in their promotional activities
lifted overall sales.
Input and output prices continued to strengthen due to rising prices of raw
materials, according to Caixin. Output prices rose to the highest level since
the services employment index saw a marginal expansion. "Though modest, the
rate of job creation was the quickest seen since August," Caixin noted.
Services companies showed a marginal drop in the level of work-in-hand due
in part to higher employment.
Chinese services firms' confidence in their business outlook a year ahead
improved slightly, Caixin said.
Caixin's China Composite PMI, which combines the results of its
manufacturing and services surveys, rose to 51.6 in November from 51.0 in
October, indicating a modest upturn in business activity, but remained weaker
than the series historical average, according to Caixin.
The composite sub-index for new business rose at the strongest pace in
three months, while input prices increased at a marked pace, as manufacturers
suffered a bigger cost burdens.
"Consequently, total business optimism declined to its weakest since
December 2015," Caixin said.
"Mainly driven by the strong reading in the service sector, the headline
Caixin China Composite PMI came in 0.6 points higher than for the previous
month," Zhong said, "But we should be cautious because the economy may come
under rising inflationary pressure at the start of next year due to continued
price increases," he warned.
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