Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China’s Service Sector Activity Gathers Pace Thanks to Huge Trade Surplus

Economic IndicatorsMay 07, 2021 01:24AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Gina Lee

Investing.com – China’s services activities expanded at their highest speed in four months in April, with a little help from a huge trade surplus.

Data released earlier in the day said that the Caixin Services Purchasing Managers Index (PMI) for April was 56.3, higher than March’s 54.3 reading.

The figure comes after disappointing data released during the previous week, including the Caixin manufacturing PMI for April was 51.9, above the 50.8 in forecasts prepared by Investing.com and March’s 50.6 reading. Additional data from the National Bureau of Statistics (NBS) said that the manufacturing PMI for April was 51.1, lower than both the 51.7 in forecasts prepared by Investing.com and March’s 51.9 reading. The non-manufacturing PMI was 54.9, also below its March reading of 56.3.

The growth was attributed to the successful curb of COVID-19 cases in the country and ever-increasing demand due to the first global business growth in three months. Meanwhile, total new orders lead to new hiring in services firms.

However, the survey warned that inflation worsened due to a sharper rate of input costs in April, which was driven by higher labor costs and raw material prices.

“Inflation will be a focus in the future. Inflationary pressure was evident as input costs and output prices in manufacturing and services have continued to increase for several months,” said Caixin Insight Group senior economist Wang Zhe said in a note.

“In the coming months, rising raw material prices and imported inflation are expected to limit policy choices and become a major obstacle to the sustained economic recovery,” the note added.

Meanwhile, China’s trade sector also contributed to the growth of the economy.

NBS data said that exports grew 32.3% in April year-on-year, higher than the 24.1 in forecasts prepared by Investing.com and March’s 30.6% growth. Imports jumped 43.1%, higher than both the predicted 42.5% and March’s 38.1% growth.

The trade surplus was $42.86 billion for the month, higher than the forecast $28.10 billion and March’s $13.80 billion.

The jump in exports was accredited to some countries introducing stimulus measures and global reliance on China's role as the world’s biggest exporter. Meanwhile, imports rose due to a low base in 2020, as well as strong domestic demand and higher commodity prices.

China also pledged to accelerate recovery in domestic demand, which is neither even nor solid, during the previous week’s Chinese Communist Party’s Politburo meeting.

“Looking beyond the pandemic, we think China will continue to rebalance in order to rely more on domestic demand in the longer term and while gradually upgrade itself in the global supply chain,” Liu Peiqian, a China economist at Natwest Group Plc., said in a note.

China’s Service Sector Activity Gathers Pace Thanks to Huge Trade Surplus
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email