China's services sector in January recorded its quickest expansion since May 2012, data from Caixin and IHS Markit showed Feb. 5. The seasonally adjusted Caixin China General Services Business Activity Index increased to 54.7 in January from 53.9 in December 2017. A reading above 50 signals expansion.
New orders in the services sector grew at their fastest rate in 32 months with respondents attributing the rise to new projects and company expansions. As a result, companies increased headcount for the 17th straight month and at the highest rate in five months.
Services providers, however, continued to grapple with high input costs, which accelerated to its steepest pace since April 2012. As a result, business outlook for the next 12 months for the services sector dipped to a four-month low.
January's reported rise comes amidst a Feb. 2 China Daily report that Beijing will further open up its service sector to foreign investors. "The [commerce] ministry will work together with the relevant departments to open up sectors including finance, education, culture and medicine in an orderly manner," said Gao Feng, spokesperson for the Ministry of Commerce.
China also plans to further lower restrictions on foreign investors' access to fields such as child and elderly care, architectural design, accounting and auditing, commerce and trade, logistics and e-commerce, the report added.
Liu He, director of the General Office of the Central Leading Group for Financial and Economic Affairs, said China will continue to ease restrictions on market access and further open up, especially in the financial sector.
Countries such as the U.K. have been seeking to secure access to China's services sector, whose output grew 8% year over year in 2017 and outperformed the national GDP growth rate of 6.9%, official data showed. The world's second-largest economy has been focused on shifting its economic growth model to one that is driven by services, as well as consumption and innovation.
