The Caixin Services PMI for December 2024 came in at 52.2, rising from 51.5 in November, affirming a positive growth trend in China's services sector. This is the highest level since June 2024 and was more than analysts' expectations of 51.4. Any reading above 50 is seen as expansion; hence, this increase shows faster growth.
Strong domestic demand is the key driver of this growth, suggesting that people in China are spending more on services. However, the report indicates that external demand is not that strong since new export orders have fallen to their lowest level in nearly two years. This is a challenge to international trade, which may be linked to problems in the world economy.
The new orders index had been at its five-month high, which indicated that more customers are searching for services. That would help the sector well into the future. In total, though the Chinese services sector remains resilient and recovers well, the shadow of international trade remains, and growth can be affected.
