China’s services sector experienced unexpected growth in May, as shown by data from a private purchasing managers index (PMI) on Wednesday. Ongoing stimulus measures from Beijing positively impacted certain areas of the economy.
The Caixin services PMI increased to 54 in May, exceeding the expected 52.6 and surpassing April's reading of 52.5.
The sector received a significant boost from increased new business, driven by improving local and international demand. Wednesday's reading marked the 17th consecutive month of expansion for the services PMI.
However, the Caixin data contrasted with official PMI data released the previous week, which indicated slower growth in non-manufacturing activity for May compared to April.
The scope and focus of the Caixin and official surveys differ. The Caixin survey targets smaller, private businesses in southern China, while the official survey primarily examines larger, state-run enterprises in the north.
Despite the differences, Wednesday's data suggested that recent stimulus efforts from Beijing were aiding parts of the world’s second-largest economy, potentially steering it toward the government’s 5% annual growth target.
Nevertheless, the weak official PMI data highlighted that the nation’s major enterprises continued to struggle with weak demand and sluggish spending.
Beijing has introduced numerous stimulus measures in recent months to bolster growth. Yet, these measures appear to be offering only limited support to the Chinese economy, which faces significant challenges from a deflationary trend and a property market crisis.
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