China: negative signals from service sector

Negative signals still come from China, with the service sector, in May shows a slower pace. While the manufacturing industry continues to falter, the indicator on service adds uncertainty about the direction of the second largest economy in the world.

In May, the Purchasing Managers Index (PMI) service managers developed by Caixin and Markit fell to 51.1 from 51.8 in April, indicating a slowdown in the nation's service sector. It has disappointed the expectations were for a level 52.
The figure differs slightly from the official services PMI, which, in May, fell to 53.1 from 53.5 in April.

The fall of May marks the second consecutive monthly decline, indicating the weakness of the nation's services sector, despite Beijing's efforts to shore up growth. The index greater than 50 indicates expansion month to month while a result below that indicates contraction.

"The changes are still ongoing, with the manufacturing sector in contraction and expansion of services," said Zhong Zhengsheng, economist Caixin Insight Group, who added: "The government must continue to push forward to help stabilize asset recovery measures and should also loosen the monitoring and regulation of the service sector to facilitate the transformation and the healthy growth of the economy "