Activity in China’s services sector — the biggest contributor to gross domestic product — expanded at its slowest pace in 17 months in December, according to a closely-watched private survey, an indication of headwinds faced by China in its shift toward a more service-oriented economy.
The Caixin/Markit Purchasing Managers’ Index (PMI) for December fell to 50.2, from November’s 51.2. In October, the index hit a three-month high of 52. December’s services PMI reading was the lowest since July 2014.
A number above 50 indicates activity is expanding, while one below that level indicates a contraction.
Wednesday’s report was also far weaker than the government’s reading of services sector activity, and comes on the heels of more downbeat factory data.
Official services PMI for December, released on Thursday, rose to 54.4, from November’s 53.6, while the final Caixin/Markit manufacturing PMI contracted for the tenth straight month in December.