- Qu Hongbin, chief economist at HSBC
Activity in China's services sector rose at the fastest pace in three months in December, reflecting an economic resilience outside the country's manufacturing and property sectors. The HSBC China services Purchasing Managers' Index inched up to 53.4 in December up from 53.0 in November, with a reading above 50 indicating expansion in the sector. HSBC added that new business volumes and employment in the service sector both improved in the reported month. A sub-index measuring new business retreated slightly to 53.9 in December down from the highest level in more than two years of 54.2 in November, but remained firmly in expansion territory. The labour market was also strong, with the employment sub-index reaching an 18-month high. However, services firms were less upbeat on the outlook. A sub-index for business expectations for the year ahead declined to the lowest level since August 2014, with many companies saying increasing competition was hurting their pricing power. An alternative gauge, the official non-manufacturing Purchasing Managers Index, climbed to 54.1 in December from 53.9 in November, according to the National Bureau of Statistics.
The growth in the services sector contrasts with data last week, which showed China's factories struggled at the end of 2014, adding to signs of the nation's economic engine's slowdown.
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