Archives January 2017

Services sector expands fastest in 17 months

China’s services sector expanded at the quickest pace in 17 months in December as new orders increased rapidly in a further sign that the economy was stabilizing, a private survey showed yesterday.

The Caixin General Services Purchasing Managers’ Index edged up to 53.4 last month from 53.1 in November, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.

It was the highest reading since July 2015 as demand in the sector picked up.

A sub index showed growth in new work at services companies quickened to a 17-month record, according to the survey.

The fast growth in the services sector echoed an increase in manufacturing activities as the Caixin General Manufacturing PMI, released on Wednesday, rose to a four-year high of 51.9 points.

“Manufacturing and services both expanded in December, showing that recovery in the economy continued,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group. “The Chinese economy performed better in the fourth quarter than in the previous three quarters” adding that he was certain the government’s full year growth target of between 6.5 and 7 percent will be reached.

In the first three quarters, China’s GDP grew 6.7 percent, within the official target of 6.5 to 7 percent. But it was 0.2 percentage points lower than the annual growth in 2015.

Services made up 58.5 percent of GDP growth, up 3.4 percentage points from a year earlier.

The Caixin PMIs, slanted toward private and export-oriented companies, indicated the private sector expanded in December and outperformed China’s official PMI.

China’s official PMI, released on Sunday by the National Bureau of Statistics and the China Federation of Logistics and Purchasing and focusing on state-owned manufacturers, dipped to 51.4 in December from November’s 51.7. But PMI stayed in the expansion zone for the fifth straight month with the reading above 50.

In the services sector, the official non-manufacturing PMI dipped to 54.5 from November’s 54.7 points.

Chinese couriers to collect 500 bln yuan in 2017

China’s burgeoning courier service sector is predicted to generate 500 billion yuan (72 billion U.S. dollars) in business revenue this year, a postal official said Thursday.

Over 40 billion express parcels will be sent in 2017, said Ma Junsheng, head of State Post Bureau (SPB).

In 2016, 31.3 billion parcels were sent, and the service created over 200,000 jobs, data from SPB showed.

The sector collected 400 billion yuan of business revenue last year, compared to just shy of 30 billion yuan in 2006, Ma said, calling the sector a “dark horse” of the economy.

China’s courier market has grown from a handful of small businesses into a vibrant market contested by industry heavyweights, expanding 50 percent annually over the past six years, he said.

Leading delivery service provider ZTO Express became an NYSE-listed company in October 2016, the biggest U.S. IPO by a Chinese company after e-commerce giant Alibaba.

The debut came after the domestic listing of Yto Express, while competitors including SF Express, STO Express and Yunda Express expect to follow suit this year in a rush to buy more land, facilities, equipment and trucks.

The couriers’ success is replicable and adaptable for the global market, Ma said.

Last year, the country’s couriers helped deliver products bought online worth over 4 trillion yuan, or 12.5 percent of total retail sales of consumer goods, he said.

Still, China wants couriers to better serve its manufacturing industry and, to this end, it has launched 322 pilot coordination projects to accommodate an annual industrial output of over 120 billion yuan.

On the agriculture front, courier services have helped expand sales channels for farm products, and facilitated the sale of products worth over 100 billion yuan in 2016 and facilitated an on-going poverty-relief campaign.

The sector is well-positioned for the task, as courier services now cover 80 percent of towns and villages, and the country plans to extend this network by 2020, according to the SPB.

The increasing heft of the sector reflects China’s solid progress in re-balancing its economic structure from manufacturing and investment to services and consumption.

Delivery and postal services are leading the growth in the service sector in China, home to the world’s fastest growing postal market, Ma said earlier.

The country aims to deliver 50 billion express parcels annually, generating 800 billion yuan in business revenue, by 2020.

December manufacturing activities expand to four-year high: private survey

China’s manufacturing sector continued to expand with the purchasing managers’ index hitting a 47-month high in December, a private survey showed Tuesday.

Caixin General China Manufacturing Purchasing Managers’ Index (PMI), a private gauge of China’s manufacturing activity, came in at 51.9 in December, up from 50.9 in November, according to a survey conducted by financial information service provider Markit and sponsored by Caixin Media Co. Ltd.

This was the index’s biggest rise since January 2013, and production grew at the fastest pace in nearly six years thanks to an increase in total new work.

Official manufacturing PMI released on Sunday stood at 51.4 in December, lower than 51.7 in November and staying above the 50-point boom-bust line for the fifth straight month.