China's services sector cools in July

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‍China's services sector growth cooled slightly in July, but remained in expansionary territory, according to a private survey.

The Caixin General Services Purchasing Managers' Index (PMI) fell to 51.5 in July from June's 51.6, according to the survey conducted by financial information service provider Markit but sponsored by Caixin Media Co. Ltd.

The PMI is a key gauge of the sector's health and a reading above 50 indicates expansion.

The number comes after China released an official survey that showed a cooling but also expansionary sector. The non-manufacturing PMI showed a decline from 54.9 to 54.5.

The official survey samples a wider range of companies than the private survey. The official survey samples 4,000 relatively large non-manufacturing companies, while the Caixin survey has a smaller sample size of over 400 companies that are mainly small and medium-sized firms.

Chinanews Photo

China's services sector includes finance, real estate services, marketing, transport and retail, accounting for 51.6 percent of its overall economy in 2016.

China has potential for services sector development

The sector still has much potential to develop in the future because the account it has in terms of the overall GDP is still below the level of middle-income economies.

Middle-income economies have the average level of 57 percent in their countries' GDP, while developed countries usually have their services sectors consist of 74 percent of the GDP.

According to research firm the Economic Intelligence Unit, China is currently at an early-to-middle stage of development in terms of per capita consumption. The report says around three-quarters of China will likely be defined as "middle income" in 15 years' time.

China will become increasingly open in the future

China is becoming increasingly open and the future will bring more opportunities to the rest of the world - remaining the most attractive investment destination, according to Chinese Premier Li Keqiang.

The country's economy has been going through a structural change, and valuable changes have been made in the country's economic structure, according to Li.

Hangzhou.com Photo

During Summer Davos held in China's Dalian city in June, Li said that China has secured a major shift from too much reliance on export and investment to generating growth through consumption, the services sector and domestic demand.

The Chinese premier said that China will continue to open up and build a globally competitive business environment.

"We will encourage foreign-invested companies to reinvest their profits in China, support multinational companies in setting up regional headquarters in China, and encourage foreign investment in central and western China and old industrial bases, such as northeast China."