China services activity grows more than expected in May- Caixin PMI

China’s services sector grew more than expected in May, private purchasing managers index data showed on Wednesday, as persistent stimulus measures from Beijing benefited some facets of the economy.

The Caixin services PMI rose to 54 in May, more than expectations of 52.6 and higher than the 52.5 reading in April.

Increased new business- on improving local and overseas demand- were a key boost to the sector. Wednesday’s reading showed the services PMI expanding for a 17th consecutive month.

Still, the Caixin data contrasted with official PMI data released last week, which showed that non-manufacturing activity grew at a slower pace in May than April.

But the Caixin PMI survey differs from the official survey in its scope and areas covered. The Caixin survey covers smaller, private businesses in southern China, while the official survey focuses more on larger, state-run businesses in the north.

Still, Wednesday’s data indicated that recent stimulus measures from Beijing were helping support some facets of the world’s second-largest economy, a trend that could put it on track to meet the government’s 5% annual growth target.

But weak official PMI data signaled that the country’s biggest enterprises were still under pressure from weak demand and sluggish spending.

Beijing rolled out a swathe of stimulus measures in recent months to support growth. But they so far appeared to be providing only limited support to the Chinese economy. A deflationary trend and a property market crisis are the two biggest points of contention for the economy.