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China Services Industries Expand at Slower Pace, HSBC PMI Shows

March 04, 2013

China’s services industries expanded at a slower pace in February, a private survey showed, adding to signs that a recovery in the world’s second-biggest economy is moderating.

The services Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics today declined to 52.1 from 54 in January. A reading above 50 indicates expansion. A separate government-backed survey published on March 3 showed non- manufacturing industries expanded at the slowest pace since September.

Today’s report may increase prospects that the economic rebound will slow after two manufacturing indexes showed slower expansions in February. The government is targeting 7.5 percent growth this year, the same goal as in 2012, outgoing Premier Wen Jiabao said today.

“Service sector growth moderated on slower demand growth in February, likely reflecting the impact of Beijing’s recent frugality campaign as well as the greater volatility of the readings around Chinese New Year period,” Qu Hongbin, chief China economist for HSBC in Hong Kong, said in the statement. Services may show “modest improvement” in coming months on a “healthy labor market” and recovering growth in manufacturing, Qu said.

The Shanghai Composite Index, the country’s benchmark stock gauge, rose 0.3 percent at 9:51 a.m. local time. The index dropped 3.6 percent yesterday, the biggest decline since August 2011, after the government intensified a three-year campaign to cool property prices.

Holiday Timing

China’s economic data in the first two months are distorted by the shifting dates of the weeklong Lunar New Year festival, which fell in January last year and February this year.

The nation’s economy expanded 7.9 percent in the final three months of 2012 from a year earlier, the first pickup in two years. Expansion may accelerate to 8.2 percent in the three months through March, according to the median estimate of 23 analysts surveyed by Bloomberg News.

Services industries, which include retailing, telecommunications and transportation, accounted for 45 percent of gross domestic product last year, up from 41 percent in 2003.

--Zheng Lifei. Editors: Scott Lanman, Rina Chandran

To contact Bloomberg News staff for this story: Zheng Lifei in Beijing at

To contact the editor responsible for this story: Paul Panckhurst at

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