China's Services Sector Growth Slows to Six-Month Low Amid Weak External Demand

China's services sector Purchasing Managers' Index (PMI) recorded a slight slowdown in December 2025, falling to 52.0 points from 52.1 in November.

This reading, in line with market expectations, marks the sector's weakest growth rate since June.

Data indicated that both new orders and business activity continued to expand, but at the slowest pace in six months, impacted by declining external sales and a drop in tourist numbers, which limited the sector's recovery.

In the labor market, employment shrank for the fifth consecutive month as companies reduced full-time and part-time staff due to cost pressures and restructuring plans.

Input costs experienced a modest increase, driven by higher raw material prices, representing one of the highest inflation rates in 2025, though price growth remained moderate.

Conversely, companies cut selling prices amid intensifying market competition.

Business confidence improved to its highest level in nine months, supported by expectations of improved market conditions and future expansion plans, though it remains below the historical average, reflecting continued caution regarding near-term growth prospects.