China's December Caixin Services PMI at 52.2... Highest in 7 Months

Chinese financial information provider Caixin announced on the 6th that the Caixin Services Purchasing Managers' Index (PMI) recorded 52.2 in December last year.

This is an increase of 0.7 points from the previous month (51.5) and the highest level since June 2024. It also exceeds the market forecast (51.4) surveyed by Bloomberg.

Shanghai, China. Reuters Yonhap News

Bloomberg reported that this indicates an improvement in domestic demand following the announcement of economic stimulus measures by Chinese authorities.

Previously, the National Bureau of Statistics of China announced that the services activity index for December last year was 52, up 1.9 points from the previous month, which is consistent with this trend.

The PMI statistics, based on surveys of purchasing managers in service companies, serve as an indicator of economic trends. A reading above the baseline of 50 indicates economic expansion, while below 50 indicates contraction.

Looking at the detailed indices, new business rose from 51.8 in the previous month to 52.7. However, new export business decreased for the first time since August 2023. The employment index also entered contraction territory for the first time in four months. Companies cited market competition and uncertainties in global trade as concerns.

Meanwhile, the manufacturing PMI for December last year, announced earlier, was 50.5, below the previous month (51.5) and Reuters' market forecast (51.7).

Wang Zhe, Chief Economist at the Caixin Think Tank, said, "As a result of a series of economic stimulus measures since the end of September, positive changes have increased and the national economy is generally operating steadily." However, he added, "At the same time, some sub-indices of the Caixin China Manufacturing PMI for December showed weakness, and further observation is needed regarding the sustainability and effectiveness of previous stimulus measures." He also stated, "Since the external environment will become more complex in 2025, policies must be prepared in advance and respond in a timely manner." Furthermore, he emphasized, "Follow-up policies should focus on increasing household income and improving livelihoods, especially enhancing the consumption capacity and willingness of vulnerable groups."

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