China's service sector is growing at the slowest pace in 13 months as orders subside, a poll shows

China's service sector is growing at the slowest pace in 13 months as orders subside, a poll shows

China's service sector saw its weakest growth in more than a year last month as new orders faded. This resulted in a private survey. This indicates a further loss of economic momentum, with an approximate 2018 coming to an end.

The slowdown in the services sector, which accounts for more than half of the Chinese economy and constitutes an important employment factor, is particularly worrying for policymakers as they seek to offset rising pressure on exports from a heated US dollar trade dispute United States.

The purchasing managers' index for Caixin / Markit services (PMI) fell from 53.1 in September to 50.8 in October, the lowest level since September 2017, approaching the 50s mark separating growth from contraction.

Any persistent weakness in the service sector would hamper Beijing's efforts to achieve steady growth in the face of the trade dispute with the United States, a slowdown in domestic production, and campaigns to curb over-capacity, pollution, and corporate debt.

A slowdown in the Chinese real estate market, which also makes a significant contribution to the economy, has weighed on demand for real estate services.

New Caixin's sub-index for new business showed virtually no growth in October at 50.1 (compared to 52.4 in the previous month) and the worst performance since falling in November 2008 during the global financial crisis.

According to the survey, business confidence in future activity pushed to a three-month low.

The country's financial services sector has been particularly hard hit by subdued market conditions.

China relies on services, notably services with high added value in finance and technology, to reduce the traditional dependence of the economy on heavy industry and investment.

Some companies surveyed by Caixin also expressed concerns about the potential impact of the Sino-US trade dispute on future activity.

The impact of trade disputes on corporate confidence and real activity has become increasingly prevalent in the economy.

A separate Caixin poll published last week showed that China's manufacturing sector barely grew in October after being bogged down in the previous month.

October was the first full month after the entry into force of the latest US tariffs.

Washington and Beijing imposed additional tariffs on the other party's goods on September 24, and US President Donald Trump threatened to impose further duties on China.

Caixin's composite manufacturing and services PMI, also released Monday, fell to 50.5 in October, from 52.1 the month before. That was the lowest level since June 2016.

With a glimmer of hope, Trump and Chinese President Xi Jinping had what the US president described last week as a "very good" telephone discussion on trade.

They were scheduled to meet at the end of November, on the sidelines of the summit meeting of the G20 summit in Argentina.

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