China’s services sector grew at its fastest pace in three months in May. The figures, reported by  Reuters, add to evidence that the country’s post‑pandemic recovery is being driven increasingly by consumer‑facing and high‑value services rather than heavy industry alone. 

The RatingDog China General Services Purchasing Managers’ Index, compiled by S&P Global, rose to 54.4 in May from 52.6 in April, comfortably above the 50 line that separates expansion from contraction. It was the strongest reading since February, according to the private survey.

New business grew at the fastest pace in three months, supported by stronger domestic demand, new client wins and business innovation, while new export orders returned to expansion after slipping in April. Service providers also hired more staff for the first time in four months as backlogs of work increased, suggesting companies were confident enough about demand to add capacity.

The private survey’s figures are broadly consistent with official data showing that services have become the main driver of China’s growth so far this year.

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Official statistics show the services industry accounted for 61.7 per cent of China’s gross domestic product in the first quarter of 2026, up 0.4 percentage points from a year earlier, and contributed more than 63 per cent of overall economic growth. 

Within that, information technology, software and internet services, leasing and business services, finance, as well as tourism‑related sectors such as catering and accommodation, all posted solid double‑digit or mid‑single‑digit gains.

A separate official business‑activity index for services stood at 50.2 in March, indicating expanding activity and improving market conditions.

The PMI survey noted that input costs for service firms rose at the fastest rate since late 2024, reflecting higher oil and fuel prices, wage increases and other procurement expenses. Companies passed on some of these costs, with selling prices rising modestly, but business confidence about activity in the year ahead remained strong, underpinned by expectations of firmer demand and further expansion plans.

Economists say the numbers reinforce the picture of a Chinese economy where services – rather than factories – are playing a central role in stabilising growth and providing new opportunities in areas from digital platforms and logistics to tourism and finance.