China's Services Activity Expands Slowly in January
Beijing – China's services sector growth slowed in January due to the Lunar New Year holidays, according to a private survey released Wednesday.
The Caixin/S&P Global services purchasing managers' index (PMI) declined to 51.0 from 52.2 in December but remained above 50, indicating expansion. This result aligns with the official PMI, which showed services activity eased to 50.3 from 52.0.
New business growth declined to a four-month low, while employment levels retreated to their weakest point since April 2024. The drop in employment is attributed to the earlier Lunar New Year holiday, leading to temporary restaurant closures and departures of workers for celebrations.
Unfinished work volume decreased for the first time in six months due to slower growth in new business and improved efficiency. Business sentiment improved from December, though concerns persist about heightened competition and geopolitical uncertainties.
The Trump administration's recent tariffs on Chinese goods prompted Beijing to impose retaliatory levies. Experts believe these measures may moderately impact China's economic growth.
The Caixin/S&P Global Composite PMI, encompassing both manufacturing and services, fell to 51.1 in January, down from 51.4 in December. Growth softened to its lowest level in four months, as faster manufacturing growth could not outweigh the slowdown in services.
China continues to face challenges from a prolonged property crisis, which has dampened investment and confidence. However, the government has emphasized prioritizing domestic consumption in its policies. The Lunar New Year holiday resulted in record-breaking revenue at movie theaters, aided by vouchers issued by local governments to encourage spending.