China's Service Sector Rebounds on Stronger Hiring and Demand

The uptick in activity contrasts with official government figures, which indicated stagnation in the service economy last month. According to RatingDog, the sector benefited from a recovery in domestic demand, helping the new business subindex rebound from a four-month low. While export orders continued to grow for the fourth consecutive month, the pace of that growth has cooled since June’s peak.

Employment trends offer the most optimistic signal, with the service sector adding jobs for four straight months. This marks the longest period of sustained hiring since 2023, with growth rates hitting a three-year high. Yao Yu, founder of RatingDog, noted that business sentiment regarding the 12-month outlook has also climbed, recovering from recent lows.

Despite the expansion, inflationary pressures persist. Input costs for labor, materials, and fuel rose for the 18th consecutive month in August. Businesses have responded by raising output prices for a third month running, although the rate of increase remains marginal and steady compared to July.