BEIJING — China’s services sector showed stronger momentum in September, adding another positive signal to the country’s mixed economic picture as businesses entered the final quarter of 2026.
The RatingDog China General Services Purchasing Managers’ Index rose to 51.6 in September from 51.4 in August, according to data reported by Reuters. The reading remained above 50, the threshold separating expansion from contraction, and marked the fastest pace of services growth in three months.
New orders provide a key signal
One of the most important features of the September survey was stronger new business. Companies reported improved demand and increased efforts to expand their customer base. New export orders also grew at a faster pace than in August.
For China’s economy, stronger services demand is significant because services employ a large share of workers and include industries ranging from tourism and transport to finance, technology and business services.
Employment rises for a fifth month
The survey showed employment increased for a fifth consecutive month. Although the pace of hiring eased to a four-month low, continued employment growth suggests that some companies are adding staff to manage higher workloads.
Employment is particularly important for the broader Chinese economy because household spending is closely linked to income expectations and job security. Stronger hiring can therefore support consumption if the trend continues.
Prices remain a concern
The survey also showed that output prices declined in September for the first time in four months. The decline was the sharpest since April 2022, according to Reuters.
Lower selling prices can benefit consumers, but they can create pressure on business margins. If companies face rising wages or other costs while selling prices decline, profitability may become more difficult.
Business confidence improves
Despite pricing pressure, business confidence strengthened during September. Companies cited expectations of firmer market conditions, expansion plans and new project wins.
Confidence matters because service companies often make hiring and investment decisions based on expectations about future demand. Improved sentiment can translate into additional recruitment, new locations or technology investment.
Services complement stronger manufacturing data
The services data arrive alongside signs that China’s manufacturing sector also improved in September. The official manufacturing PMI rose to 50.1 from 49.8 in August, returning to expansion territory. A separate private manufacturing survey reached 52.1.
Together, the manufacturing and services indicators suggest that parts of China’s economy entered the final quarter with stronger activity than earlier in the summer. However, the data do not eliminate concerns about weak consumption, investment and property-sector conditions.
Tourism and the National Day holiday
The timing of the services improvement is important because China’s National Day holiday begins on October 1. Tourism, restaurants, hotels, transport and entertainment businesses typically experience major changes in demand during the holiday.
Holiday spending will provide another opportunity to observe consumer behavior. Strong travel and service activity could support businesses that have faced uneven demand during the year.
Why overseas demand matters
The rise in new export orders suggests that some Chinese service companies are also benefiting from international demand. Digital services, logistics, tourism-related services and business support can increasingly cross borders through online platforms.
China’s foreign-exchange regulator recently said the country expects trade in services to continue growing and highlighted technology and digital services as areas with potential.
What businesses will watch next
The key question is whether September’s improvement continues through the fourth quarter. Businesses will be watching new orders, employment, prices and consumer spending to determine whether stronger activity becomes a broader trend.
For policymakers, services growth can help diversify the economy away from reliance on property and heavy industry. For companies, sustained demand would create room for investment and hiring.
Why this matters globally
China is a major consumer market and an important provider of services to global businesses. Changes in Chinese tourism, logistics, technology and professional services can affect companies in Asia and beyond.
The September data therefore provide another piece of the picture as markets assess China’s economic performance at the start of the final quarter of 2026.
Read more China business developments in our Business section and follow global developments through our International News section.
Source: Reuters reporting on the RatingDog China services PMI.
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