China’s services sector is quietly defying the broader economic slowdown. Despite cooling momentum, the industry continued to expand in October, buoyed by strong holiday spending and domestic travel.

The RatingDog services PMI stood at 52.6, slightly down from 52.9 in September. It remains well above the 50-mark that signals growth. The latest reading marks the sector’s third consecutive month of expansion. This suggests that services remain a key stabiliser for the world’s second-largest economy.

While manufacturing and construction activity weakened, sectors such as tourism, retail, and entertainment benefited from the extended autumn holidays and early shopping season. Analysts said domestic demand and new orders continued to rise. Meanwhile, hiring and profit margins stayed under pressure.

Beijing has been encouraging banks to lend more to service businesses and consumers. It is also stepping up public spending to boost jobs and social services. These moves reflect a broader effort to tap domestic consumption as exports and investment growth lose steam.

Economists believe China’s 5% annual growth target remains achievable. However, they warn that momentum could slow further to near 4% in the coming quarters — among the weakest since the pandemic.

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