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* China factory, services surveys point to further solid
* Some analysts say signs of easing momentum need to be
* Stable growth would give gov't more room to tackle debt
By Elias Glenn
BEIJING, Feb 6 Growth in China's services sector
remained robust in January as companies reported a solid
increase in orders, though the pace of expansion eased from the
previous month, a private business survey showed.
The services PMI fell marginally to 53.1 in January on a
seasonally adjusted basis, from 53.4 in December, the
Markit/Caixin services purchasing managers' index (PMI) showed.
But it remained well above the 50-mark that separates
expansion in activity from contraction on a monthly basis.
Improving business conditions prompted service companies to
hire staff at the fastest pace in 20 months.
The strong reading mirrored improvements in manufacturing
surveys last week, giving China's policymakers more room to
focus on containing the financial risks from a sharp rise in
Though activity in services slowed slightly from December,
strong growth looks set to continue, in line with policymakers
efforts to rebalance the economy toward services and
consumption, which are the biggest drivers of growth in the
world's second-largest economy.
Expansion in new business for services firms slowed slightly
from December but remained robust.
And service firms remained strongly positive about the
business outlook for the next 12 months, citing planned company
expansions, new product developments and forecasts of
strengthening client demand. A sub-index for business
expectations matched an 18-month high with a reading of 60.8.
However, input prices rose the fastest in nearly four years.
And while companies also raised their output prices the most
since August 2015, companies said tough competition held back
their ability to raise prices, suggesting a squeeze in profit
Caixin's composite PMI covering both the manufacturing and
services sectors showed a similar pattern of solid but slightly
easing growth, falling to 52.2 in January from the previous
month's near 4-year high of 53.5.
A number of economists have predicted a loss of growth
momentum this year as a property boom cools and the boost from
previous stimulus starts to wear off.
Chinese firms are also facing the prospect of higher
The central bank has begun to raise key short-term rates in
a sign that policymakers will focus on controlling high debt
levels and cooling down overheated property and commodities
But the rate increases so far have been modest, suggesting
authorities remain wary about tapping the brakes too hard and
stunting economic growth.
"The economy continued to recover, but the expansion rate
has slowed. Meanwhile, inflationary pressures continued to build
up as prices increased further," said Zhengsheng Zhong, director
of macroeconomic analysis at CEBM Group, in a note with the PMI
"The economy is unlikely to maintain the pace of expansion
seen in the fourth quarter of last year given that the
manufacturing sector's willingness to restock has declined.
China's economic growth may decelerate after the first quarter
of this year."
(Reporting by Elias Glenn; Editing by Kim Coghill)