Lagging Business Activity Slowdown Growth of China’s Services Sector

Source: Caixin.

China’s Caixin Services Purchasing Managers’ Index (PMI) June dropped to 50.3, the lowest level in the last 14 months. CSI 300 Index gains +0.062%.

• The recent Caixin Services PMI was 4.8% lower than the reading in May and the lowest figure in 14 months.
• The scattered COVID-19 outbreaks in Guangdong Province was responsible for the decline in the volume of orders in the services sector.
•  The volume of new export orders in the sector expanded on a lower percentage in June.
• The risks of inflation are reduced slightly as its recovery faces additional challenges, including increased sensitivity of the services sector to the pandemic.
• China’s businesses in the services sector had positive attitudes towards economic development in 2021, as the pandemic spikes in South China might have dented the confidence to the lowest level in the last nine months.
• Caixin PMIs in manufacturing, services, and composite PMI dropped by 0.1, 2.0, and 1.3 percentage points in June compared to May’s readings.