China’s services business activity index remained in decline | December 31, 2023

Bloomberg writes about this with reference to data from the National Bureau of Statistics (NSB) of the People’s Republic of China.

Experts note that a drop in PMI below 50 points indicates a decline in industrial production. This happened against the backdrop of weakening demand in the country. According to analysts, weak PMI indicators could push the Chinese Central Bank to ease monetary policy and lower rates as early as early January.

At the same time, the service business activity index rose to 50.4 points compared to 50.2 points in November. This was facilitated by the expansion of the construction sector amid increased infrastructure investment. However, the services index remained in the decline zone.

According to China’s National Security Service, the sub-index of new orders for industrial products fell to 48.7 points, and the index of new export orders fell to 45.8 points.

Experts explain this by weakening demand in China, including against the backdrop of a protracted crisis in the real estate market. Imports are also negatively affected by falling consumer prices.

Overall, December PMI data suggests a slowdown in the Chinese economic recovery at the end of 2022. This may strengthen incentive measures from the PRC authorities.

Before this, economists said the Chinese economy would slow down next year.

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