China services growth adds to economic revival hopes
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Growth in China's increasingly important services sector accelerated in December at its fastest pace in four months, adding to signs of a modest year-end revival in the world's second-largest economy.
China's official purchasing managers' index (PMI) for the non-manufacturing sector rose to 56.1 in December from 55.6 in November, the National Bureau of Statistics (NBS) said on Thursday.
Two PMIs on the manufacturing sector earlier this week also suggested China's economic growth was picking up late in 2012, although signs persist it depends primarily on state-led investment.
Data so far suggests only a muted revival in economic growth, rather than a return to the double-digit pace seen in China over the past three decades, Hong Kong-based economist Dariusz Kowalczyk said.
"Absolute levels of both December manufacturing and non-manufacturing PMIs remain relatively low by historical standards and consistent with only modest rebound in economic activity," Kowalczyk, Credit Agricole's senior economist for Asia except Japan, said.
He said economic growth picked up in the fourth quarter of 2012 after sliding for seven straight quarters, but in sharp contrast to China's previous, more pronounced bull runs, it could fade after the first quarter of 2013.
The greatest driver in the pick up in the non-manufacturing sector in December was a jump in construction services to 61.9 from 61.3 in November. Industries including transport slumped, the NBS said in an accompanying statement.
A reading above 50 indicates growth is accelerating, while one below 50 indicates it is slowing.
The strength in construction services is consistent with other indicators, including rising land prices, that point to a revival in China's property markets, which support about 40 other industries. Signs of a pick up come despite central government protestations that it will not relax credit and purchasing curbs that have stifled the sector in the past two years.
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