China Service Growth Hit 6-Month Low in December
By Reuters | 04 Jan, 2026

China's service sector PMI slipped to 52.0 in December from 52.1 in November though business expectation sentiment strengthened to a 9-month high.

China's services activity expanded at its slowest pace in six months in December, as growth in new business softened and foreign demand declined, a private-sector survey showed on Monday.

The RatingDog China General Services PMI, compiled by S&P Global, edged down to 52.0 in December from 52.1 the previous month, marking the weakest reading since June. The 50-point mark separates expansion from contraction.

New business grew at the slowest pace in six months. New export business slipped into contraction after expanding the previous month, which the survey attributed mainly to lower tourist numbers.

Business sentiment strengthened, with the expectations sub-index rising to a nine-month high, supported by forecasts of improved market conditions and expansion plans for 2026.

"The services sector ended 2025 with a 'modest growth, high expectations' profile," said Yao Yu, founder of RatingDog, adding that shrinking employment and volatile external demand remain key constraints.

China's economy has struggled to regain momentum amid structural challenges including a prolonged property downturn and deflationary pressures, even as it remains on track to meet a growth target of around 5% this year.

The government has stepped up efforts to curb overcapacity and price wars among firms to help combat persistent deflationary pressures.

Last month, Chinese leaders at a key gathering of the Communist Party promised to maintain a "proactive" fiscal policy next year that would stimulate both consumption and investment to maintain high economic growth.

The survey showed companies cut staffing levels for a fifth straight month, shedding both full-time and part-time workers, which contributed to a slight backlog build-up.

Input costs rose for a 10th consecutive month, driven by higher raw material and labour costs. However, firms lowered selling prices, with the survey citing intensifying competition that has limited pricing power.

The Composite Output Index, which combines manufacturing and services performance, came in at 51.3, compared with a 51.2 in November.

(Reporting by Liangping Gao and Ryan Woo; Editing by Sam Holmes)