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China’s Services PMI Recorded Strongest Decline in Two Years in March

According to the survey conducted by Markit in collaboration with Caixin, China’s purchasing managers’ index for the service sector was 42.0 in March, down from 50.2 in February.

The March PMI contracted the most since 2020 as the Chinese government imposed strict measures to contain the spread of COVID-19. This has a strong impact on travel and domestic demand.

The data were in line with the China National Bureau of Statistics (NBS) previously reported that the March service PMI was 48.4, down from 51.6 in February. The index below 50 indicates that China’s services sector is in contraction.

The Chinese economy began to recover in the first two months of this year. But now China is facing a slowdown after the government introduced measures to restrict production and travel in several cities. For example, in Shanghai, the financial center, and Shenzhen, a technology hub to control the spread of COVID-19.

Recently, China announced it would extend lockdown measures in Shanghai, a city of 26 million people, and lift traffic restrictions in Shanghai after the carpet was laid out for COVID-19 testing. The number of coronavirus cases in the city has risen to more than 13,000, and the first lockdown in western Shanghai was supposed to end yesterday. However, the city has decided to extend the period until further notice.

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