A private gauge of China’s service-sector activity bounced back in January to expansionary territory, signaling a quick economic recovery following Beijing’s removal of its stringent COVID-19 containment regime in December. The Caixin China Services purchasing managers index rose to 52.9 in January from 48.0 in December, said Caixin Media Co. and S&P Global on Friday.
In the final four months of 2022, the index had stayed below the 50 mark, which separates activity expansion from contraction, underscoring the economic toll from China’s COVID policies. The gauges for business activity and total new business both came in above 50 for January, ending a four-month period of contraction. The removal of travel restrictions also boosted services exports, with the reading for new export orders climbing into expansionary territory, said Caixin. The subindex measuring employment remained in contraction for the third straight month but recorded a much milder contraction, as surging COVID infections continued to weigh on job opportunities, according to Caixin. Meanwhile, Beijing’s COVID policy shift significantly boosted business confidence. The gauge for expectations for future activity rose nearly six points from the previous month, reaching the highest level since February 2011, Caixin said. A competing official gauge showed a more robust rebound. China’s official nonmanufacturing PMI, which covers service-sector and construction activity, jumped to 54.4 in January, compared with 41.6 in December, ending a three-month contraction, the National Bureau of Statistics said Tuesday. The official subindex measuring service activity rose sharply to 54.0 in January from December’s 39.4, while the subindex measuring construction improved to 56.4 from 54.4 in December.