BEIJING, Feb 3 (Reuters) - China's services activity in
January expanded for the first time in five months as spending
and travel got a boost from the lifting of stringent COVID-19
curbs, sending business confidence to near 12-year highs, a
private sector survey showed on Friday.
The Caixin/S&P Global services purchasing managers' index
(PMI) rose to 52.9 in January from 48.0 in December, above the
50-point mark which indicates expansion in activity, marking an
end to a four-month contraction.
The reading mirrored the results of a larger official
services PMI published earlier this week, adding to evidence of
a rebound in activity in the world's second-largest economy as
disruptions from reopening fade.
Beijing's abrupt abolishment of pandemic curbs and
faster-than-expected peaking of infections that boosted demand
for services, especially during the week-long Lunar New Year
holidays, set the stage for a faster and fuller economic
recovery.
This year's celebration is the first in three years without
any form of lockdown curbs. China abandoned its strict
"zero-COVID" policy in early December after protests against the
restrictions, allowing people to travel and the virus to spread
rapidly throughout the country.
"After being hit by the latest wave of COVID infections, the
primary focus of economic work should be on accelerating
economic recovery and promoting normalised production and social
order," said Wang Zhe, senior economist at Caixin Insight Group.
China's reopening also boosted services exports, with the
sub-index of new export orders increasing into expansionary
territory in January from a contraction in December.
Last month, firms surveyed said they grappled with rising
energy and raw material costs, staff reductions and an increase
in the backlog of work.
However, firms were still bullish about recovery prospects
for the next 12 months after the full scrapping of China's
protracted zero-COVID policy, with the confidence index hitting
the highest since February 2011.
"Improving expectations, restoring confidence, increasing
income, expanding consumption, and stimulating domestic demand
will be among the priorities," Wang said.
Caixin/S&P's composite PMI, which includes both
manufacturing and services activity, rose to 51.1 in January
from 48.3 the previous month, marking the first expansion in
five months.
This week in a study session of the Politburo, a top
decision-making body of the ruling Communist Party, Chinese
President Xi Jinping telegraphed plans to revive consumption, a
major challenge facing the economy.
The Caixin PMI is compiled by S&P Global based on responses
to questions sent to purchasing managers in China.
(Reporting by Liangping Gao and Ryan Woo; Editing by Jacqueline
Wong)
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