BEIJING (Dec 5): The HSBC Purchasing Managers' Index for China's services sector fell to 52.5 from 54.1 in November, its slowest rate of growth in three months and the latest of a string of data points that reveal a quickly cooling economy in need of policy support.
"With price pressures easing further, Beijing can and should use policies that are targeted on small businesses and service sectors to keep GDP growth at above 8 percent for the coming year," Hongbin Qu, HSBC's chief China economist, said in a statement.
The fall in the HSBC gauge is sharp given that October's reading was 54.1 -- the strongest growth in four months -- though the index still remains above the 50 level that separates expansion from contraction in the sector.
China's official PMI for its non-manufacturing sector fell to 49.7 in November from 57.7 in October, the China Federation of Logistics and Purchasing said on Saturday.
The readings mirror similar weakness in the country's giant manufacturing sector and underline expectations that Beijing will ease monetary policy further to cushion the blows of the global economy.
PMI data in the past week has shown that both domestic and export orders are weakening, helping explain the central bank's decision last week to cut reserve requirements for commercial lenders for the first time in three years.
The move to free up cash was a signal that the central bank was shifting toward loosening monetary policy to support the economy, which is widely expected to grow next year at less than 9 percent for the first time in a decade, economists said.
But other economists are reluctant to read too much significance into the services indexes given their volatility, lack of seasonal adjustments, simple calculation methodology and their consequently weaker predictive power. - Reuters
"With price pressures easing further, Beijing can and should use policies that are targeted on small businesses and service sectors to keep GDP growth at above 8 percent for the coming year," Hongbin Qu, HSBC's chief China economist, said in a statement.
The fall in the HSBC gauge is sharp given that October's reading was 54.1 -- the strongest growth in four months -- though the index still remains above the 50 level that separates expansion from contraction in the sector.
China's official PMI for its non-manufacturing sector fell to 49.7 in November from 57.7 in October, the China Federation of Logistics and Purchasing said on Saturday.
The readings mirror similar weakness in the country's giant manufacturing sector and underline expectations that Beijing will ease monetary policy further to cushion the blows of the global economy.
PMI data in the past week has shown that both domestic and export orders are weakening, helping explain the central bank's decision last week to cut reserve requirements for commercial lenders for the first time in three years.
The move to free up cash was a signal that the central bank was shifting toward loosening monetary policy to support the economy, which is widely expected to grow next year at less than 9 percent for the first time in a decade, economists said.
But other economists are reluctant to read too much significance into the services indexes given their volatility, lack of seasonal adjustments, simple calculation methodology and their consequently weaker predictive power. - Reuters
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