Service sector activity declines in China

In China, service sector activity contracted in December as rising COVID-19 cases hit demand. Although the services sector PMI prepared by Caixin/S&P Global rose to 48.0 points in December from 46.7 points in November, it remained below the break-even level of 50 points, indicating contraction. The services PMI has been below 50 points for the last 4 months. Service companies participating in the Caixin/S&P Global survey presented a more optimistic picture regarding the recovery outlook for the next 12 months. The confidence index rose to its highest level in 17 months with the assessment that the lifting of COVID restrictions could increase consumption. In December, the Caixin/S&P Global composite PMI also recovered to 48.3 points from 47.0 points in November.