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China Services Industry Index Rises Amid Slowdown Concern

China Manufacturing
China’s gross domestic product is projected to expand 7.3 percent this year, the weakest pace since 1990, as the government reins in credit. Photographer: Brent Lewin/Bloomberg

May 3 (Bloomberg) -- A Chinese services-industry index rose in April as Premier Li Keqiang grapples with countering a slowdown in the world’s second-biggest economy while avoiding large-scale stimulus.

The non-manufacturing purchasing managers’ index was at 54.8 last month compared with 54.5 in March, the National Bureau of Statistics and the Federation of Logistics and Purchasing said in Beijing today. A number more than 50 indicates an expansion.

Property construction plunged in the first quarter and economic growth slowed as China’s leaders face increasing challenges in trying to maintain the rate of expansion while reining in debt. Li said in an article in the Communist Party journal Qiushi published May 1 that the government held firm last year against short-term stimulus that could have added to difficulties in the years ahead.

Gross domestic product is projected by economists to expand 7.3 percent this year as the government controls credit, less than the government target of about 7.5 percent. A manufacturing gauge released last week was below analysts’ forecasts.

Almost all Chinese provinces failed to meet their growth targets in the first quarter even after scaling back their ambitions as the government instructs officials to focus on restricting debt and curbing pollution.

Thirty of 31 provinces and municipalities reported missing their goals, with the biggest shortfall in northeastern Heilongjiang, where an expansion of 4.1 percent compared with an 8.5 percent target for the year. Most localities are aiming for lower growth than in 2013.

To contact the reporter on this story: Paul Panckhurst in Beijing at ppanckhurst@bloomberg.net

To contact the editors responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net Stanley James, Chua Kong Ho

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