China’s Services Sector Growth Slows in August Amid Rising Costs and Job Cuts, Caixin PMI Reveals

China’s services sector expansion decelerated in August, as indicated by the Caixin/S&P Global services PMI dropping to 51.6 from July’s 52.1. Despite the ongoing summer travel boom, rising costs prompted some firms to reduce staff, highlighting concerns over the sector’s growth sustainability. The new business index remained in positive territory, buoyed by increased export business in tourism. However, input costs surged while selling prices fell due to heightened competition. The slowdown in services, paired with the challenges in the manufacturing sector, raises concerns about China’s ability to meet its 2024 growth target of around 5%.