REPEAT: China Caixin Dec Services PMI Surges to Over 3-yr High

Repeats Story Initially Transmitted at 02:22 GMT Jan 4/21:22 EST Jan 3

     BEIJING (MNI) - The Chinese services sector expanded in December at the

fastest pace since August 2014 due to robust new orders, according to the latest

survey of purchasing managers jointly released by Caixin magazine and Markit.

     The headline Caixin Service PMI jumped to 53.9 from 51.9 in November, the

third 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. 

     But prices continued to rise. 

     "The expansion in new business picked up for the second consecutive month

... while input prices rose at the joint-fastest pace since February 2013,"

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 Dec. 31 by the China Federation of

Logistics and Purchasing (CFLP) and the National Bureau of Statistics (NBS). The

CFLP/NBS Services PMI rose to 55.0 from November's 54.8 reading. 

     Growth in the Caixin services PMI was attributed to new business and rising

input prices. 

     "Latest data indicated that services companies saw the strongest upturn in

new orders since May 2015, with around 14% of monitored companies noting an

increase," Caixin said. 

     Input and output prices continued to strengthen due to rising costs for raw

materials, transportation and salaries, according to Caixin. 

     Average input costs accelerated to their past pace since February 2013.

Service providers continued to raise their output prices, although only

moderately.

     The services employment index saw a marginal expansion. "Services companies

continued to add to their payroll numbers at the end of the year amid reports of

rising business requirements," Caixin noted.

     Services companies showed a marginal drop in the level of work-in-hand for

the fourth consecutive months due in part to higher employment.

     Chinese services firms' confidence in their business outlook a year ahead

improved to the strongest since June, Caixin said.

     Caixin's China Composite PMI, which combines the results of its

manufacturing and services surveys, rose to 53.0 in December from 51.6 in

October, the highest in a year, indicating an obvious upturn in business

activity, according to Caixin. 

     The composite sub-index for new business rose at the strongest pace since

January, 2013, while input prices increased at a marked pace, unchanged from

that in November . 

     "However, the (combined) business confidence remained at a

historically-subdued level overall," Caixin said.

     "The December readings of the Caixin PMI surveys also point to improving

economic sentiment. Expansions in total new orders and new export business

supported optimism among manufacturers and service providers towards the

business outlook for next year," Zhong said, "Although China's economic growth

remains under downward pressure, it is still resilient. However, special

attention should be paid to whether future policies will become tighter than

expected," he warned.

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com