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Business activity in China’s services sector fell significantly in December to its lowest level since August of 2011, according to results of another private sector survey released on Monday.
Official data for China’s 2013 GDP is set to be released on January 20.The HSBC/Markit Economics services Purchasing Managers’ Index (PMI) also dropped to 50.9 in December, its lowest since August 2011, from 52.5 in November, HSBC said on Monday.
The Chinese government has, however, pledged ‘appropriate liquidity’ in 2014 to quell fears of a cash crunch in 2014.
Chinese Premier Li Keqiang on a recent inspection tour to the northern Chinese city of Tianjin last Sunday asserted that Chinese economy and financial markets will grow steadily in 2014.
“We will stick to the prudent monetary policy, keep appropriate liquidity, realise reasonable growth in credit and total social financing and keep prices largely stable,” Li was quoted as saying in the statement.
Qu Hongbin, chief economist for China at HSBC, saw the PMI decline as mainly due to slower output growth.
But he said, “The recovering momentum since August 2013 is continuing into 2014, in our view. With inflation still benign, we expect the current monetary and fiscal policy to remain in place to support growth.”
All the recent measures, however, remained above the 50 point level that separates expansion in activity from contraction.
China’s economic growth is likely to come in at 7.6 percent in 2013, the government has said.
TBP and Agencies