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The Chinese service sector has grown at its fastest rate for four months indicating that the country is set for a period of sustained economic recovery.
Newly released results for China’s National Bureau of Statistics shown that non-manufacturing purchasing manager’s index, known as PMI, increased to 56.1 in December from November’s 55.6, with any figure over 50 meaning growth.
The Chinese service sector saw $47.57m of foreign investment in the 11 month’s preceding December’s PMI results, against a 7.1 decrease of investment into the manufacturing sector.
Whilst reaching a four month high the service sector figures are significantly lower than the ten month high recorded in March 2012 of 58.0.
China’s service sector was responsible for 43% of the country’s GDP in 2010 and provided 36% of jobs in 2011.
An increase in the Chinese construction activity to 61.9 in December, from 61.3 in November, drove the service sector rise. Previously released figures relating to manufacturing also reported increased output.
Darius Kowalczyk, senior economist for Credit Agricole’s, stated though that whilst the construction and service index has seen growth “absolute levels of both December manufacturing and non-manufacturing PMIs remain relatively low by historical standards and consistent with only modest rebound in economic activity”.
The performance of China, the world’s second largest economy, is regarded by analysts as a key indicator for trends throughout the global economy in 2013, which is expected to retain sluggish levels of growth.
In an open letter to global leaders as the UK began it’s presidency of the G8, which excludes China, Prime Minister David Cameron “it is clear that in 2013 the world will continue to face grave economic uncertainty”.
Mr Cameron also called for increased cooperation to combat tax evasion, seen as by UK government is a vital step to restore economic activity. Arguing that the G8 nations “can work together to sign more countries up to the international standards. And we can examine the case for strengthening those standards themselves – whether by improving existing standards or looking at new ones”.
