Feb. 3 (Bloomberg) -- A gauge of China’s non-manufacturing industries expanded at a slower pace in January as growth in the world’s second-largest economy cooled and the government prolonged a campaign to cool property prices.
The non-manufacturing purchasing managers’ index fell to 52.9 from 56 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement today in Beijing. A reading above 50 indicates an expansion.
Premier Wen Jiabao has pledged to expand services and consumer spending to boost jobs and help sustain growth as Europe’s debt crisis threatens exports and property sales slide. The government said it will increase credit to smaller companies, including some service providers, and local authorities are raising minimum wages, pensions and welfare payments.
“Sliding construction during the low season dragged down the overall growth rate” of the index, countering the “sound performance of holiday-related retail sales” and transportation, Cai Jin, a federation vice chairman, said in the statement.
The government needs to stabilize the expansion of domestic demand and raise the growth potential of service industries with more fiscal support such as “structural” tax cuts to boost consumer spending, the federation said in the statement.
Sales by retailers and restaurants during the weeklong Lunar New Year holiday ended Jan. 28 rose 16.2 percent from a year earlier on higher sales of clothes, jewelry and food, according to data from the Ministry of Commerce.
By contrast, home sales in the nation’s four biggest cities, including Beijing and Shanghai, fell 66 percent to 109 units during the festival compared with the holiday period last year, according to data from Centaline Property Agency Ltd., China’s biggest real-estate brokerage.
--Li Yanping. With assistance from Regina Tan in Beijing. Editors: Scott Lanman, Nerys Avery
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