China Services Index Jumps in Sign of Sustained Rebound
A Chinese services-industry index rose to a six-month high, adding to signs that the world’s second-biggest economy will sustain a rebound after a two-quarter slowdown.
The non-manufacturing purchasing managers’ index rose to 55.4 in September from 53.9 in August, the Beijing-based National Bureau of Statistics and Federation of Logistics and Purchasing said today. A number more than 50 indicates an expansion.
An increase in tourist numbers for a current week-long Chinese holiday points to robust consumption, Lu Ting, Bank of America’s Hong Kong-based economist, wrote in a research note received today. Gains in non-manufacturing industries help Premier Li Keqiang shift the economy away from dependence on exports and investment, with the next phase of that strategy to be mapped out at a Communist Party meeting in November.
“The rising service PMI suggests that the recovery in 3Q13 was quite broad based even if the recovery was led by fixed asset investment in transport and urban infrastructure.,” Lu said today in an e-mail. The “robust” service sector indicates the low probability of a hard landing, according to Lu.
Fiscal support measures including spending on railways, urban infrastructure and shanty-town redevelopments are helping Li to protect a goal of a 7.5 percent economic expansion this year.
“China’s economy is stabilizing in a good trend and the nation has the confidence, conditions and ability to realize its main economic targets this year,” Li Keqiang said in a speech on Sept. 30, as cited by China National Radio.
China’s economy may have expanded 7.9 percent in the third quarter and growth may slow to 7.7 percent in the current three-month period due to a high comparison base, according to Lu.
The statistics bureau reports third-quarter gross domestic product on Oct. 18. The economy probably grew 7.7 percent from a year earlier, according to a Bloomberg News survey of analysts, up from the second quarter’s 7.5 percent pace.
Visitors to the nation’s top 125 tourist attractions rose 19 percent from a year earlier to 8.4 million people during the first two days of the National Day break after adjusting for changes to the number of surveyed attractions, according to the Bank of America report.
The federation said a gauge of new orders jumped, retail spending grew strongly and a logistics industry index rose. Today’s report followed smaller-than-forecast gains in manufacturing indexes for September.
China on Sept. 29 inaugurated an 11-square-mile experimental area in Shanghai, where it will allow trials of yuan convertibility in capital flows, establish an international energy center and allow overseas parents of companies established in the zone to sell yuan-denominated debt in China.
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