China’s services gauge slows again with growth at six-month low
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People visiting the annual Ice and Snow Festival in Harbin, Heilongjiang Province, China, on Jan 4.
PHOTO: REUTERS
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- China's services sector growth slowed to a six-month low of 52 in December, impacted by fewer tourist arrivals, particularly from Japan.
- New export business contracted again, attributed to strained relations with Japan following remarks on Taiwan by Prime Minister Sanae Takaichi.
- Weak domestic consumer spending and a large trade surplus leave China vulnerable, despite President Xi Jinping's confidence in meeting 2025 targets.
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BEIJING – China’s services activity expanded at the weakest pace in six months, according to a private survey, as new export business returned to contraction because of fewer tourist arrivals.
The RatingDog China services purchasing managers’ index (PMI) slipped slightly to 52 in December, slowing for a fourth straight month, according to a statement published Jan 5. That matched the median forecast of economists surveyed by Bloomberg, with any reading above 50 indicating an expansion.
A smaller number of tourists – especially from Japan – was “primarily” responsible for the renewed drop in new export business, said RatingDog founder Yao Yu.
Tokyo and Beijing have been at loggerheads for weeks, as tensions rose after Japanese Prime Minister Sanae Takaichi’s remarks on Taiwan
Weak consumer spending at home continues to leave the Chinese economy vulnerable to risks abroad, particularly as a trade surplus exceeding US$1 trillion (S$1.29 trillion) draws growing scrutiny from global trading partners.
Even so, President Xi Jinping declared on New Year’s Eve that China is set to meet its economic targets for 2025, with growth expected to reach “about 5 per cent”.
Despite the resilience in exports shown during months of trade tensions with the US, the broader economic backdrop is worrisome.
Investment lost further ground in November and industrial output undershot expectations, with consumer spending growth slowing sharply as the property sector deteriorated further.
The official PMI survey released last week showed services activity had its second straight monthly decline for the first time since late 2023.
The services sector had been a rare bright spot in China’s sluggish consumer market for much of 2025. Retail sales in services consistently outpaced growth in goods sales, with an increase of 5.4 per cent in the first 11 months of 2025.
The government has sought to revive household spending by promoting the consumption of services such as sports, travel and entertainment. In September, it announced a new initiative to boost that effort, rolling out measures to extend the operating hours of museums and tourist sites, host more sporting events, and allow more companies to enter such industries as high-end medical care.
Signs had emerged that the world’s second-biggest economy was on firmer footing in the final month of 2025.
China’s factory activity staged a surprise recovery by ending an eight-month contraction streak, according to the official PMI, with a private manufacturing gauge also unexpectedly moving back into expansion territory. BLOOMBERG
