MKsport view of OH Bay Park and Qianhai in Shenzhen, South China's Guangdong Province on August 21. China in September announced to deepen opening-up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone. Photo: cnsphoto" src="https://www.globaltimes.cn/Portals/0/attachment/2021/2021-10-17/072a3d31-22b4-455e-b6f3-67343f29ad1c.jpeg" />

The view of OH Bay Park and Qianhai in Shenzhen, South China's Guangdong Province on August 21. China in September announced to deepen opening-up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone. Photo: cnsphoto

The Caixin China purchasing managers' index (PMI) for the services sector came in at 51.4 in February, edging up from 51 in January. Notably, it has stayed above the 50 threshold for 26 consecutive months, underscoring the sector's consistent expansion, according to a private survey released on Wednesday.

A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

The growth in the Caixin services PMI was driven by multiple factors. Survey respondents attributed it to increased sales, the initiation of new projects and promotional activities. New businesses registered notable growth while overseas sales saw a significant rise, with new export business growth reaching a three-month high, according to the survey.

Employment in the services sector also picked up in February following two months of contraction. Some enterprises correlated the increase in hiring to the growth in new business, the survey showed.

Increased confidence in the outlook also boosted recruitment activity in the latest survey period. Optimism improved to its highest level since November. Firms are hopeful of stronger market demand and better economic conditions. To take advantage of an expected stronger business environment, companies are planning to release new services and enhance promotional efforts in the coming months, according to the survey.

Wang Zhe, senior economist at Caixin Insight Group, noted in a statement that the data reflect a continuous recovery in the services sector. The 26-month streak of activity expansion in services is a strong indication of its recovery. Services providers, supported by an improving economic environment, are rolling out new products and ramping up promotional efforts, Wang said.

"Services firms were generally optimistic about the economic outlook for the coming year and planned to accelerate efforts to boost sales," Wang added.

Data from the National Bureau of Statistics (NBS) also showed that China's non-manufacturing PMI came in at 50.4 in February, up 0.2 points from the previous month.

"With the anticipated pro-growth policies aimed at boosting domestic consumption, stabilizing the real estate market and revitalizing the stock market, alongside proactive fiscal measures and the opening of major infrastructure projects across the country, we project China's services PMI will remain stable," Wu Chaoming, chief economist of Hunan Chasing Financial Holdings Co, told the Global Times.

Furthermore, China's manufacturing PMI will likely continue to rebound, supported by the seasonal improvement in production activities, which will provide a solid foundation for the stable performance of the manufacturing PMI. The accelerated development of new quality productive forces is likely to stabilize the manufacturing PMI and positively influence market expectations in the coming months, Wu noted.

The Caixin China Manufacturing PMI released earlier this week also improved to a three-month high of 50.8 in February. That was up from January's 50.1, as the manufacturing sector's growth improved due to higher output and rising orders.

Meanwhile, NBS data also showed that China's manufacturing PMI also rose to 50.2 in February, up from 49.1 in January.

Zhao Qinghe, a senior statistician at the NBS, attributed the rise to accelerated business resumption following the Spring Festival holidays. As businesses ramped up operations and production accelerated, manufacturing demand showed a steady recovery, Zhao said.

Global Times