China's Services Sector Activity Rises In March

BEIJING, April 7 (Bernama) -- The business activity in China's services sector rose slightly in March on stronger demand, reported Xinhua News Agency on Wednesday. Xinhua said the Caixin China General Services PMI (Purchasing Managers' Index), based on a survey by financial information service provider, Markit, and sponsored by Caixin Media, came in at 52.2 in March, up from 51.2 in February. "A reading above 50 indicates expansion while a reading below 50 represents contraction. "The improved data point to a modest rebound across China's services sector as new orders rose among services providers in March. "Some respondents commented that improving underlying market conditions had helped to secure new work," it quoted the Markit/Caixin report. The Caixin China General Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 companies. Xinhua also quoted He Fan, Chief Economist at Caixin Insight Group, as saying that overall, the services sector developed well but the economy was riding on choppy waves. "This indicates the lack of a solid foundation for a recovery and the government should push forward supply-side reform to encourage the development of emerging industries," he said. Meanwhile, the Caixin China Composite PMI, which covers both manufacturing and services, recorded the highest reading in 11 months at 51.3 in March, up from 49.4 in February, showing a renewed increase in overall business activity. The expansion in overall business activity showed that the Chinese economy is warming thanks to pro-growth fiscal and credit policy support. Earlier this week, the official PMI for the manufacturing sector came in at 50.2 in March, up from February's 49 to its highest level since August. China has cut benchmark interest rates and banks' reserves requirement ratio multiple times since 2014 and forced to make more such moves by the economy logging at its lowest annual expansion in a quarter of a century at 6.9 per cent last year. In early March, the central bank announced another RRR cut of 0.5 percentage point for commercial banks, the first such cut this year. Labelling the current monetary policies as "prudent with a slight easing bias", China aims for a deficit-to-GDP ratio of three per cent for this year, up from 2.3 per cent last year, allowing more spending. --BERNAMA