2023-06-05 06:35:43
Activity in services in China rose in May for the fifth consecutive month, confirming the recovery of the sector after the lifting of anti-Covid restrictions at the end of 2022, according to an independent index published on Monday. The Purchasing Managers’ Index (PMI), released by media group Caixin and S&P Global, came in at 57.1 last month, up from 56.4 in April.
A number below 50 reflects a contraction in activity. Beyond that, it indicates expansion. May’s figure is the second highest since November 2020. Supply and demand for services continued to grow, according to the Caixin study. The new export orders sub-index also remained in positive territory for the fifth month in a row.
«Service providers remained optimistic, in part because the market has improved since the end of Covid”, underlines the economist Wang Zhe for Caixin. China applied for nearly three years a very strict health policy against Covid-19 with almost compulsory PCR tests, confinements and travel restrictions, which heavily penalized the economy.
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Rising demand
These measures were suddenly lifted in early December. The Chinese have thus been back for a few months in restaurants, stations, airports and tourist places, helping to relaunch services. In May, the increase in activity and the needs of companies led them to increase their workforce for the fourth consecutive month, according to the Caixin study.
For its part, the composite index, which combines services and manufacturing industry, rose sharply to 55.6 points, against 53.6 in April. “Production, demand and exports have all increased” more “in manufacturing, employment has deteriorated, prices have fallen and industrialists are less optimistic about the outlook», note Wang Zhe. «Labor market stabilization» et «increased income» via «a proactive tax policy should be priorities“, he underlines.
China’s GDP rose 4.5% year on year in the first quarter, its fastest pace in a year. An increase largely driven by household consumption, while the resumption of activity in factories is slow to really materialize.
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