By Wang Yanlin
BEIJING, Feb. 7 (Xinhuanet) -- China’s service activity among private firms expanded at the slowest pace in 29 months in January, signaling weaker expansion of business and new orders at the start of 2014.
The HSBC China Services Business Activity Index, a gauge of operating conditions in private service companies, ended at 50.7 last month, down from 50.9 in December, HSBC Holdings Plc and consulting firm Markit said today. A reading above 50 means expansion.
Comparatively, China’s official non-manufacturing Purchasing Managers’ Index, compiled by the China Federation of Logistics and Purchasing and slanted toward state-owned enterprises, also eased to a 23-month low of 53.4 in January from 54.6 a month earlier.
Qu Hongbin, chief economist for China at HSBC, said the slower expansion of service activities reflected soft manufacturing growth and the impact of China’s latest measure to curb official extravagance.
“As business sentiment remains stable, we expect service growth to bounce back a little in the coming months,” Qu said. He added that a meaningful improvement relies on stronger growth of manufacturing and the implementation of reforms to boost services.
China’s slowing growth is largely due to the country’s deepening reforms in economic restructuring, and it was good for China to address problems such as overcapacity and low investment efficiency, analysts have said.
The World Bank earlier lowered its expectation of China’s 2014 economic growth to 7.7 percent from the previous 8 percent, reflecting deleveraging and less reliance on policy-induced investment.
China is to forge ahead with reforms this year while maintaining stable economic growth by sticking to a proactive fiscal policy and a prudent monetary policy, officials said.
(Source: Shanghai Daily)