China’s services sector experienced its slowest expansion in six months during December, according to a private-sector survey released Monday. The RatingDog China General Services PMI, compiled by S&P Global, dipped to 52.0 from 52.1 the previous month. This marks the weakest reading since June, although it remains above the 50-point threshold separating expansion from contraction. The survey indicated a softening in the growth of new business and a decline in foreign demand. RatingDog is a financial data and analysis company that provides insights on the Chinese economy. It offers a range of products and services to help investors and businesses make informed decisions.
New export business contracted after expanding the previous month, attributed mainly to a reduction in tourist numbers. Despite the slowdown, business sentiment strengthened, with expectations for improved market conditions and expansion plans in 2026 driving the sub-index to a nine-month high. Yao Yu, founder of RatingDog, noted that shrinking employment and volatile external demand continue to pose significant challenges.
The survey revealed that companies reduced staffing levels for the fifth consecutive month, impacting both full-time and part-time workers. This contributed to a slight increase in backlogs. Input costs continued to rise for the tenth straight month, fuelled by higher raw material and labour expenses. However, firms lowered selling prices amid intensifying competition, limiting their pricing power.
The Composite Output Index, which combines manufacturing and services performance, edged up slightly to 51.3 in December from 51.2 in November. These figures come as China’s economy navigates structural challenges, including a property downturn and deflationary pressures, while aiming to meet its growth target of approximately 5% for the year.
