China’s services sector expands in December, private survey shows

A private gauge of China’s services activity climbed to the highest in five months, potentially easing some concern about the economy.

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The Caixin services purchasing managers’ index rose to 52.9 last month from 51.5 in November, Caixin and S&P Global said in a statement Thursday. That compares to the consensus estimate among economists of 51.6. A reading over 50 indicates expansion from the prior month.

Disappointing official data released last week will likely pressure fiscal and monetary policymakers to act after leaders vowed to maintain a pro-growth stance in 2024. It showed that China’s factory activity shrank in December to the lowest level in six months, while service activity remained in contraction.

Chinese government bond yields fell to the lowest in more than three years on Thursday as bets on further monetary easing gathered pace following the official data.

The yield on the 10-year sovereign note dropped to 2.54 per cent, the lowest since April 2020. The benchmark CSI 300 Index fell 1.1 per cent, set for its third day of losses.

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The private survey results have been better than the official polls for several months in the past year, in part due to their different sample sizes and the coverage of companies in different sectors of the supply chain.

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