China Services Sector Growth Hits Three-Month High

China’s services sector expanded at its fastest pace in three months, according to the latest General Services PMI released by RatingDog China.

The index rose to 52.3 in January 2026, up from December’s six-month low of 52.0 and above market expectations of 51.8. The latest reading marked the strongest expansion in services activity since October, driven by firmer growth in new business, supported by a renewed increase in international sales.

In response to stronger demand, companies raised staffing levels for the first time since July, contributing to a modest rise in backlogs. Outstanding business continued to accumulate at a moderate pace, although the rate of increase did not accelerate significantly despite faster new order growth, reflecting an improvement in labor supply.

On the pricing front, input costs continued to rise, driven by higher prices for purchased items and fuel. However, the pace of cost inflation eased to its lowest level in five months, while selling prices remained broadly stable, indicating limited pass-through pressure on consumers.

Looking ahead, business sentiment weakened to below the average level seen in 2025, amid rising concerns over the outlook for global economic growth and the potential impact of external demand conditions on China’s services sector.