China’s services sector grew at its quickest rate in seven months during December 2024, with the Caixin Services PMI rising to 52.2, surpassing expectations of 51.4 and the previous month’s reading of 51.5. The expansion was fueled by stronger domestic demand, although export business saw a decline amid softening foreign interest.
The report noted that sales growth was primarily supported by promotional efforts and improved domestic demand. However, new export business contracted for the first time since August 2023.
While services showed robust growth, manufacturing PMI data indicated slower-than-expected expansion, signaling the diminishing impact of previous stimulus measures. In response, China is preparing proactive fiscal stimulus and moderately looser monetary policies in 2025 to counter potential economic pressures, including the anticipated impact of steep U.S. import tariffs under President-elect Donald Trump.
Despite challenges, sentiment in the services sector remains optimistic, with firms hopeful that government policies and business development efforts will support sales growth in the coming year.
