A fresh reading on China’s services sector for June showed the mainland’s rebalancing away from the manufacturing sector was continuing apace. The China Caixin services PMI climbed to 52.7 from 51.2 in May, marking the fastest increase in 11 months. Levels above 50 indicate expansion, while levels below signal contraction. Bloomberg reported the June number was an 11-month high.
Those figures echoed the official services PMI data released last week, which showed the services PMI rose to 53.7 in June, better than May’s 53.1 figure. The official data generally tracks larger and state-owned enterprises, while the the Caixin survey focuses on smaller, private companies.
While the manufacturing PMI data tends to be more closely watched, China’s pivot toward domestic consumption and away from manufacturing- and investment-led growth means the service sector, which includes consumer industries such as real estate, retail and leisure, has become the majority of the mainland economy. It is also a key barometer of consumption, accounting for more than 50 percent of gross domestic product.
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