According to a private survey released on Wednesday, Chinese service activity appears to slow down over the next three months, as a decline in overseas orders is offset by improved domestic demand.
Recent data shows a slowdown in growth. The RatingDog China General Services PMI, compiled by S&P Global, decreased slightly from 52.9 in September to 52.6.
Additionally, much of the data reflects the variation in sample coverage, with the government’s official PMI showing a change from 50.2 to 50.1 in September.
There is a difference in the work behaviour of RatingDog’s index and in the official PMI tracking, as RatingDog’s index is viewed as a better gauge of smaller, export-oriented service providers, and the official PMI primarily tracks large and medium-sized enterprises, including state-owned companies.
Despite facing a prolonged property slump, weak domestic demand, and trade uncertainties, China remains on track to meet its approximately 5% economic growth target for this year. The country plans to boost stimulus efforts and has unveiled its economic blueprint for 2026-2030. This plan emphasises strengthening manufacturing and technology self-reliance, while also committing to increasing domestic consumption.
The survey indicated growth in the services sector was primarily fueled by the faster expansion of new business. However, new export orders declined for the first time in four months, with respondents citing uncertainties in global trade.
Last week, U.S. President Donald Trump and Chinese President Xi Jinping reached an agreement that included U.S. tariff reductions and a pause on Beijing’s new restrictions on rare earth minerals and magnets, prolonging a fragile trade truce between the two largest economies.
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Yao Yu, founder of Ratingdog, noted that “Sustained employment contraction and pressure on profit margins remain the main constraints facing the sector.” Regarding employment, staffing levels fell more rapidly in October as capacity pressures eased. Service providers reduced outstanding business for the first time since March.
