"Job Cuts and Profitability Decline Persist"
China's service sector activity in October showed a slight slowdown, aligning with market expectations.
On the 1st of last month (local time), tourists rode rickshaws in Beijing, China, to celebrate National Day. Photo by Reuters Yonhap News
According to a report released on November 4 (local time) by Chinese private research firm Rui Ting Gou and S&P Global, China's service sector Purchasing Managers' Index (PMI) for October stood at 52.6, down 0.3 points from September's 52.9. The PMI, which is based on surveys of corporate purchasing managers, serves as an indicator of economic trends in the relevant sector. A reading above the baseline of 50 indicates expansion, while a reading below 50 signals contraction.
The Rui Ting Gou index, previously known as the 'Caixin PMI' when published by Chinese financial information provider Caixin in collaboration with S&P Global, is regarded as reflecting the business conditions of private, export-oriented, and small to medium-sized enterprises more accurately than the PMI released by the National Bureau of Statistics.
The Rui Ting Gou service sector PMI announced on this day matched the median market forecast of 52.5, as surveyed by Bloomberg News. Despite the economic slowdown, this is attributed to increased household consumption and travel during the long holiday last month. Yao Wei, founder of Rui Ting Gou, stated, "Ongoing job cuts and deteriorating profitability remain the main obstacles facing the service sector."
The Chinese government, in its upcoming five-year economic plan (2026-2030), has prioritized manufacturing and technological self-reliance, while also mentioning the need to boost consumption. Due to the prolonged real estate downturn, sluggish domestic demand, and trade uncertainties, there are ongoing calls within China for expanded economic stimulus measures.
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