China’s service sector rebounds yet World Bank cuts forecasts

Julian Harris
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THE WORLD Bank slashed its estimates for Chinese GDP growth yesterday, yet separate business survey data showed a healthy rebound in the country’s service sector last month.

HSBC’s latest purchasing managers’ index (PMI) for China’s services industry climbed to 54.3 in September, up from 52 in August, it revealed yesterday.

The higher the PMI score above 50, the faster the sector’s growth.

The improvement was driven by a morale-boosting increase in firms’ levels of new business.

Yet China’s economic boom is nonetheless believed to be easing, with the World Bank saying that Chinese GDP will expand by 7.7 per cent this year – half a percentage point lower than its previous forecast in May.

However, the group still expects Chinese growth to spring back to above the eight per cent mark next year.

Meanwhile, growth across the whole of the East Asia and Pacific region will mean continued falls in poverty, with fewer than one in four people (24.5 per cent) living on $2 per day next year – down from 28.8 per cent in 2010.