China's services activity expansion eases in November, Caixin PMI shows

BEIJING: China's services activity expanded at a slower pace in November, pressured by easing new business growth, including in exports, a private sector survey showed, as the economy braces for a rocky ride of more U.S. tariffs under a second Trump administration.

The Caixin/S&P Global services purchasing managers' index (PMI), released on Wednesday, fell to 51.5 from 52.0 in October, but remaining above the 50-mark that separates expansion from contraction on a monthly basis.

That aligns with the official PMI released on Saturday, which showed non-manufacturing activity weakened to 50.0.


China's economy has faced constant pressure from multiple fronts this year, with consumer and business confidence hit by a prolonged property downturn, local government debt risks and weakening global demand.

Beijing has responded with a series of policy measures, including increased fiscal support and monetary easing, to shore up economic growth.

While markets expect more support from policymakers to bolster the recovery, U.S. president-elect Donald Trump's threat to impose tariffs in excess of 60% on Chinese imports has added a fresh layer of uncertainty to the world's second-biggest economy.

"Service providers generally expressed confidence in market improvement amid policy support, although some were concerned about the future trade environment," said Wang Zhe, Senior Economist at Caixin Insight Group.

The survey showed the new business sub-index declined to 51.8 in November from 52.1 the previous month and the expansion of new business inflows from abroad also slowed.

Yet, companies hired additional staff for a third consecutive month to manage workloads, and overall business confidence rose to its highest level in seven months.

Firms reduced their selling prices due to competition, but they also had some relief from lower material costs which led to a decrease in average input costs.

Wang said while the economic recovery has gained momentum in November, the downside pressure on growth remains prominent.

"The structural and cyclical pressures facing the economy are expected to continue, coupled with the likelihood of continued accumulation of external uncertainties, which requires sufficient policy buffers," he said.

The Caixin/S&P Global Composite PMI, which combines the manufacturing and services PMIs, rose to 52.3 from 51.9, driven by faster expansion in the manufacturing sector.