China’s services activity expanded faster in May, with the Caixin Services PMI rising to 51.1 from 50.7, signalling continued growth for the 29th month in a row.

Consumer demand showed signs of stabilising, as both supply and demand in the services sector improved slightly, helped by efforts to attract new clients.

Job creation in the services industry picked up, but companies continued to offer discounts, with price cuts reaching the steepest level in eight months.

Business confidence rose slightly from April, but overall optimism stayed below average, showing lingering caution.

Export orders fell for the first time in 2024 as foreign demand weakened due to global trade tensions despite a temporary truce with the US.

Policymakers now face pressure to boost domestic consumption, especially with China’s manufacturing sector seeing its worst performance since September 2022 due to US tariffs.

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