All Services sector growth related Indexes are now positive. Services sector business confidence is positive. Both the Services Market Growth and Services Sales Growth indices are buoyant. And the overall Sales Managers Services Sector Index reflects widespread growth. In sharp contrast, the traditionally dominant (in China) Manufacturing Sector is still lagging way behind Services, and parts of industry are still impacted by the after effects of Covid. As the Services Sector now accounts for 55% + of economic activity (up sharply from a decade ago), overall economic activity appears to be rising on the back of the buoyant Services sector.

There is one final piece of good news or bad news, depending on your inclination. Price inflation seems to be a thing of the past, with the Manufacturing Price Index remaining below the 50 "no growth" line. Services registered price inflation a little above the 50 line, and the all sector index was almost precisely at 50, indicating no change in price levels overall.

Optimists can read this as confirmation that the Covid related period of dangerously rapid price inflation is over, with the genie now firmly back in the bottle. Pessimists can start worrying that Japanese style price deflation is now looking far more likely, with all the dangers that portends. The World Economics view is that the real danger now being flagged is for developed country manufacturers, and is that the "China Price" is back, with Chinese manufacturers likely to be able to offer everything from EV's to solar panels at prices way below those of competitors.

In summary, the Chinese economy has some way to go before its growth starts to resemble the heady days of 7%+ annual GDP growth. But there seems little doubt that in January, the large and now dominant Chinese Services sector grew rapidly, and despite the lagging Manufacturing sector, overall economic growth is once again looking good.

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