Services mitigate manufacturing malaise

Workers load cargo onto an airplane in Nantong, Jiangsu province. China's non-manufacturing Purchasing Managers'Index in March fell slightly to 54.4 from 55 in February. [Photo/China Daily]

Government opts for 'soft' stimulus measures to achieve growth targets this year

The steady expansion of Chinese service businesses in March comforted policymakers during a period of gloom for the manufacturing sector, but it is unlikely to stop the slowing momentum for economic growth in the first quarter of the year.

The government has decided to take "soft" stimulus measures, including the renovation of shantytowns, railway construction and preferential tax policies for more small companies to support growth.

The National Bureau of Statistics and the China Federation of Logistics and Purchasing reported on Thursday that the non-manufacturing Purchasing Managers' Index in March fell slightly to 54.4 from 55 in February, mainly because of a slowdown of growth in new orders.

It indicated the non-manufacturing industry still maintained a relatively fast growth rate, said Cai Jin, vice-president at the federation.

The reading in January was 53.4, the lowest level since 2009.

A separate survey by the British bank HSBC Holdings Plc showed the services PMI at 51.9 in March, up from 51 in February, suggesting growth in service activity strengthened to a four-month high.

Qu Hongbin, chief economist in China and the joint head of Asian Economic Research at HSBC, said the latest PMI figure "suggests a modest improvement of business activity in March, with employment expanding at a faster pace".

The HSBC survey showed that higher volumes of new work led service providers to expand their payroll numbers at the fastest rate since June 2013, which offset job losses by manufacturers.

Service sector shines in February

Services trade growth outpaces that of goods