- He Fan, chief economist at Caixin Insight Group
Activity in China's services sector rose to the highest level in six months in January, underscoring a growing divergence with the manufacturing sector that continues to falter and indicating that the government's measures is working in some parts of the economy. The Caixin China services PMI climbed to 52.4 in January, up from 50.2 in the preceding month. A reading above the key 50-mark threshold shows expansions, while below indicates contraction. The expansion was underpinned by inflows of new business accelerating to their strongest in three months, according to the report. The pace of job creation at service providers quickened to a six-month high, with some firms planning company expansion. The report showed service providers were generally optimistic about business in the coming year, with the overall degree of positive sentiment rose to its highest level since July 2015. China's service sector has been one of the few bright spots in the economy, helping to offset a sharp slowdown in traditional manufacturing industries. In 2015, services accounted for 50.4% of China's gross domestic economy, up from 48.1% in 2014. China's official nonmanufacturing purchasing managers' index, which includes the construction sector, slid to 53.5 in January from 54.4 in December, according to data from the National Bureau of Statistics. The Caixin China Composite PMI, which covers both manufacturing and services, edged up to 50.1 in January from 49.4 in December, signalling a stabilization of business activity.
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