China's Service PMI Rebounds to 54.3 in March After 4 Months

Service Sector PMI Improves Faster Than Manufacturing PMI
Risks of Inflation Pressure from US Economic Recovery and Global Liquidity

[Asia Economy Beijing=Special Correspondent Jo Young-shin] China's service sector Purchasing Managers' Index (PMI) rebounded for the first time in four months.

Chinese financial information provider Caixin announced on the 6th that China's service sector PMI for March was recorded at 54.3, up 2.8 points from the previous month. This contrasts with the manufacturing PMI released on the 1st, which fell 0.3 points from the previous month to 50.6.

The PMI is an indicator showing economic trends in the relevant sector; a value above 50.0 indicates economic expansion, while below 50.0 indicates contraction.

Caixin's service sector PMI had shown a declining trend for three consecutive months since December last year.

Caixin explained that with the service sector PMI rebounding, the composite PMI rose 1.4 points from the previous month to 53.1, marking the highest figure this year. Although the manufacturing PMI declined, the overall assessment is that the Chinese economy has entered a recovery phase.

Wang Zhe, Caixin's chief economist, said, "The pace of improvement in the service sector is faster than that of manufacturing," adding, "As a result, service sector employment has significantly improved since the beginning of this month."

However, he expressed concern, stating, "New risks are also emerging." He pointed out that inflationary pressures could arise due to global liquidity from the recovery of the global economy including the United States and quantitative easing, the resulting increase in China's exports, and excess demand in the service sector due to domestic demand recovery. He assessed that this could constrain the Chinese government's monetary policy going forward.

This content was produced with the assistance of AI translation services.