China’s Services Sector Growth Falls Short in November

Investing.com — China's services sector grew less than expected in November, according to private purchasing managers index (PMI) data released on Wednesday. Recent stimulus measures have provided only limited support.

The Caixin services PMI registered at 51.5 in November, falling short of the anticipated 52.5 and decreasing from the previous month's 52.0.

The data indicates that while recent stimulus efforts have supported business activity, more action from Beijing is needed to bolster local demand. Notably, export orders significantly boosted the services sector in November, while local demand showed signs of weakening.

This PMI reading comes after a series of robust stimulus measures initiated by Beijing since late September, all aimed at bolstering economic growth. Recent PMI data has highlighted positive trends in the manufacturing sector, which has benefited from these measures and expanded for two consecutive months.

However, uncertainty looms over the sustainability of this economic recovery, especially with increasing trade tensions and potential U.S. tariffs on the horizon.

Wang Zhe, Senior Economist at Caixin Insight Group, noted, “The downward pressure facing the economy remains prominent, marked by continued contraction of employment.” He emphasized that the effects of economic stimulus have yet to significantly impact the labor market, and there is a pressing need to build business confidence for workforce expansion.

Additionally, President-elect Donald Trump has threatened to impose steep import tariffs once he takes office on January 20, which could lead to further economic strain.

In anticipation of these potential tariffs, Beijing is expected to introduce more targeted fiscal stimulus. Two important Chinese political meetings are scheduled for December, where more details on upcoming stimulus measures may be revealed.