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China non-manufacturing sector's growth picks up

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BEIJING, July 3 (Xinhua) -- China's non-manufacturing sector grew at a faster rate in June as the world's second-largest economy showed signs of stabilizing.

The Purchasing Managers Index (PMI) of China's non-manufacturing sector, a key economic indicator, rose 1.5 percentage points to 56.7 percent in June, according to data released by the China Federation of Logistics and Purchasing (CFLP) on Tuesday.

The figure rebounded after falling for two consecutive months as non-manufacturing sector growth accelerated, the CFLP said.

A PMI reading above 50 percent indicates expansion from the previous month, while readings below this mark indicate a contraction.

"The figure shows the non-manufacturing economy has maintained steady and strong growth," said CFLP Vice Chairman Cai Jin.

The figure followed Sunday's release of the PMI for China's manufacturing sector, which grew at its slowest pace in seven months to 50.2 percent in June.

Analysts said the extent of the slowdown in June this year was minimal compared with past years, which suggests that the economy is building up a foundation for stabilized growth.

In June, the sub-index for new export orders of the non-manufacturing sector stayed flat at 50.5 percent, the CFLP data showed.

The sub-index for intermediate input prices lost 1.5 percentage points to 52.1 percent while that for charges rose 0.1 percentage points to 48.6 percent, standing below 50 percent for the second month in a row.

Meanwhile, the sub-index for business activity expectations in June gained 0.1 percentage points to as high as 65.5 percent, which reflects non-manufacturing firms' optimism about the market.

The June figures point to possibilities of stronger economic growth in the second half of this year, said Cai.

The central government pledged last month that it will prioritize stabilizing economic growth, warning that the economy faces "increasing downward pressure."

In the latest moves to spur investment and growth, the central bank cut the benchmark interest rate by 25 basis points last month following a reduction of 0.5 percentage points for the reserve requirement ratio for banks in May.

The CFLP's non-manufacturing PMI is based on a survey of about 1,200 companies in 27 industries, including transportation, real estate, catering and software development.

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