Ser­vice sec­tor sees sea­sonal soft­en­ing

But busi­ness ac­tiv­ity still ex­pands in Nov

China Daily (Hong Kong) - - BUSINESS - By CHEN JIA chen­jia1@chi­nadaily.com.cn

The ex­pan­sion of China’s non- man­u­fac­tur­ing busi­ness ac­tiv­ity eased slightly in Novem­ber be­cause of a sea­sonal de­cline in new or­ders, the Na­tional Bureau of Sta­tis­tics and the China Fed­er­a­tion of Lo­gis­tics and Pur­chas­ing said on Tues­day. The non- man­u­fac­tur­ing Pur­chas­ing Man­agers’ In­dex fell to 56 from 56.3 in Oc­to­ber, in­di­cat­ing sta­ble ex­pan­sion of the ser­vice and con­struc­tion sec­tors. New or­ders mod­er­ated in Novem­ber, es­pe­cially for the ser­vice sec­tor, as in­di­cated by the PMI sub-in­dex of 51, lower than 51.6 in Oc­to­ber.

Ac­tiv­ity in sev­eral in­dus­tries in­clud­ing air and road trans­port, cater­ing ser­vices and en­vi­ron­men­tal pro­tec­tion, con­tracted last month, with be­low-50 PMI read­ings.

Mean­while, ac­tiv­ity and new or­ders in the real es­tate mar­ket achieved a marked re­bound, ac­cord­ing to the of­fi­cial data.

Cai Jin, vice-chair­man of the CFLP, said that em­ploy­ment and busi­ness ex­pec­ta­tions in the non- man­u­fac­tur­ing sec­tor con­tinue to rise, demon­strat­ing that both the pace and qual­ity of eco­nomic growth are im­prov­ing.

“With the sub- in­dex of busi­ness’ sell­ing prices drop­ping be­low 50, in­fla­tion­ary pres­sure has been fur­ther relieved,” he said.

In Novem­ber, the subindex cov­er­ing en­trepreneurs’ ex­pec­ta­tions rose to 61.3 from 60.5, the sec­ond monthly in­crease in a row.

“Signs of a com­pre­hen­sive deep­en­ing of re­form raised by the Third Plenum of the Com­mu­nist Party of China’s 18th Cen­tral Com­mit­tee boosted en­ter­prises’ con­fi­dence,” said Cai.

On Sun­day, the NBS and the CFLP re­leased the man­u­fac­tur­ing PMI for Novem­ber, which came in at 51.4, un­changed from Oc­to­ber. The Novem­ber and Oc­to­ber PMI read­ings were the high­est since April 2012, sug­gest­ing that eco­nomic ac­tiv­ity re­mained solid.

Zhu Haibin, chief econ­o­mist at JPMor­gan Chase & Co, said that the PMI read­ings for Novem­ber and Oc­to­ber sug­gest that eco­nomic ac­tiv­ity re­mained solid through the cur­rent quar­ter.

“As the NBS PMI state­ment men­tioned, de­mand con­di­tions across in­vest­ment, con­sump­tion and ex­ports all point to a sta­ble near-term growth pic­ture,” he said.

The gov­ern­ment’s re­form mea­sures will ben­e­fit longterm growth, though some will drag on eco­nomic growth in the near term, Zhu added.

Look­ing at the re­cent eco­nomic data, No­mura Hold­ings Inc’s chief econ­o­mist in China, Zhi­wei Zhang, said: “We main­tain our view that GDP growth will slow to 7.5 per­cent in the fourth quar­ter from the peak of 7.8 per­cent in the third, and it will con­tinue to slow to 6.9 per­cent next year, amid pol­icy tight­en­ing and struc­tural re­forms.

“We ex­pect the gov­ern­ment to cut its 2014 growth tar­get to 7 per­cent at the Cen­tral Eco­nomic Work­ing Con­fer­ence to be held in the next week or two,” Zhang said.

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