Caixin China Services PMI(August,2016)

The Caixin Services PMI picked up to 52.1 in August from 51.7 in July, pointing toanother month of moderate expansion in China's services sector. Theimprovement is mainly driven by better labour market performance as well asslower contraction in outstanding business. The official non-manufacturing PMI,released last week, eased from 53.7 in July to 53.4 in August, largely due to theimpact of adverse weather and flooding on domestic construction activity.

    Excluding the construction sector, the official PMI should have also edged up alittle bit. The services sector will likely benefit from continued fiscal expansion andstrong infrastructure investment growth in the coming months, offsetting potentialfurther weakness in the housing market.