Bloomberg News

China’s Service Industries Increase at Slower Pace, HSBC Says

September 04, 2012

China’s non-manufacturing industries expanded at a weaker pace in August as new orders slowed, a private survey indicated.

The purchasing managers’ index fell to 52 from 53.1 in July, HSBC Holdings Plc and Markit Economics said today. A reading above 50 indicates expansion.

China’s government faces mounting pressure for additional measures to support growth as the economy risks slowing for a seventh straight quarter on weakness in exports and output. The HSBC gauge contrasts with a services index released Sept. 3 by the government, which showed a faster expansion in August.

“The main risk confronting China’s economy is still to the downside,” Qu Hongbin, chief China economist for HSBC in Hong Kong, said in a statement. “Beijing is expected to do more to counter-balance the external shock.”

The benchmark Shanghai Composite Index (SHCOMP) of stocks fell 0.6 percent as of 10:38 a.m. local time, approaching the level from the aftermath of the 2008 collapse of Lehman Brothers Holdings Inc.

Service industries account for about 43 percent of the economy compared with about 90 percent in the U.S. Under China’s current five-year plan, the government is seeking to raise the share of services in gross domestic product to 47 percent by 2015, the official Xinhua News Agency said in May.

--Scott Lanman. Editors: Scott Lanman, Paul Panckhurst

To contact Bloomberg News staff for this story: Scott Lanman in Beijing at slanman@bloomberg.net.

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net


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