ECONOMY

Stronger Demand Fuels China Services Growth, Caixin PMI Shows

Published: Mar. 5, 2025 9:45 a.m. GMT+8

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Growth in China’s services sector edged up in February, fueled by stronger overseas demand and higher business optimism, according to a Caixin-sponsored survey published Wednesday.

The Caixin China General Services Business Activity Index, which provides an independent snapshot of operating conditions in industries such as retail and tourism, came in at 51.4 in February, up 0.4 points from the previous month.

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Growth in China's services sector rose to 51.4 in February, indicating expansion, fueled by stronger overseas demand and business optimism, according to the Caixin China General Services Business Activity Index.
Employment in services stabilized as some businesses increased hiring, but deflationary pressures led to falling input costs and output prices.
The Caixin China General Composite PMI reached 51.5, with output and demand growth rising in both manufacturing and services, though challenges in the job market and domestic demand persist.

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Who’s Who

Caixin: Caixin provides independent reports and surveys, including the Caixin China General Services Business Activity Index and the Caixin China General Composite PMI. These indexes offer insight into China’s economic conditions by tracking the performance of the services and manufacturing sectors. Caixin’s surveys are considered early indicators for the world's second-largest economy and highlight trends such as business optimism, foreign demand, employment, and pricing pressures.

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What Happened When

June 2020：: The last time before February 2025 when input costs fell prior to February 2025.

January 2025：: Before February 2025, the Caixin China General Services Business Activity Index was at 51.0. Business activity and total new orders grew at a slower pace compared to February 2025. Employment experienced a two-month contraction.

February 2025：: The Caixin China General Services Business Activity Index increased to 51.4. The Caixin China General Composite PMI increased to 51.5. Both indices showed an increase of 0.4 points from January 2025. Business activity, new orders, foreign demand, and employment experienced growth. Deflationary pressure worsened as input costs fell fractionally for the first time since June 2020. The official services PMI decreased to 50.

AI generated, for reference only