China Services Growth Accelerates Despite Weak Overseas Demand

China’s services sector expanded at a faster pace in April, supported by stronger growth in new business, although overseas demand continued to decline, a private-sector survey showed, Liangping Gao and Ryan Woo reported for Reuters.

China’s export sector has shown signs of strain, while retail sales and industrial output have slowed.

The S&P Global China General Services Purchasing Managers’ Index rose to 52.6 in April from 52.1 in March, remaining above the 50 threshold that separates expansion from contraction.

The reading contrasts with an official survey released earlier, which showed services activity slipping back into contraction. The two surveys differ in methodology and sample size.

China’s export sector has shown signs of strain, while retail sales and industrial output have slowed.

Producer prices have recently emerged from a prolonged deflationary period, a shift that analysts say could squeeze margins as companies face higher costs and weak demand.

External risks—including geopolitical tensions in the Middle East—are adding to uncertainty over global demand and supply chains, further pressuring Chinese firms dealing with cautious spending by consumers and businesses.