China’s Services Sector Returns to Growth, but Risks Still Remain

  • by THO
  • 2 weeks ago
  • news
  • 1

By Gina Lee – China’s services sector made a return to growth in September as a major COVID-19 outbreak in the eastern province of Jiangsu was brought under control. Although providing support to a stalled economic recovery, the risk remains that more COVID-19 outbreaks could hamper the recovery again.

The , released earlier in the day, was 53.4 in September, compared to the previous month’s 46.7 figure. The Caixin survey, which focuses on the private sector, also rose above the 50-mark indicating growth and away from more-than-one-year lows.

The , released by the National Bureau of Statistics at the end of September, was at 53.2.

The services sector has been slower to recover from COVID-19 compared to the manufacturing sector. It is also more susceptible to shocks from COVID-19 outbreaks, which impact consumption and travel, and the outlook for a rebound remains uncertain.

“In view of this, in the coming months, the government should focus on improving epidemic prevention and control and alleviating supply-side pressure,” Caixin Insight Group senior economist Wang Zhe told Reuters.

“It should also find a balance among multiple objectives, such as promoting employment, holding raw material prices stable, ensuring a stable and orderly supply, and meeting targets for controlling energy consumption.”

Input prices increased for the 15th consecutive month in September and also increased at a faster pace. RIising labor, freight, and raw material costs, which drove factory activity into contraction last month, contributed to these increases, according to the Caixin survey.

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