(Photo: CGTN)

The service sector in China continued to expand in May at a steady pace, according to the latest survey from Caixin revealed on Tuesday with a services PMI score of 52.9. Levels above 50 signal an expansion, while levels below 50 indicate contraction.

That was in line with expectations and unchanged from the previous month, indicating steady expansion though at a slightly slower pace than earlier in the year. 

The new business sub-index in Tuesday’s PMI fell to 52.5 in May from 53.0 in April.

“The employment index continued to rise, while the new business index slipped slightly, indicating a positive change on the supply side and marginally weaker demand across the service sector,” Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group said in a statement.

Zhong also said the index of expectations regarding future output rose to a relatively high level, suggesting optimism across both the manufacturing and service sectors.

“However, the impact of the recent credit contraction on small businesses is worthy of attention,” he added.

The official non-manufacturing PMI edged up from 54.8 in April to 54.9 in May, data released by the National Bureau of Statistics (NBS) showed last week.

The official survey samples 4,000 relatively large non-manufacturing companies, while the Caixin survey has a smaller sample size of around 400 companies and mainly focuses on small and medium-sized firms. 

Consumption and related sectors including air transportation, express delivery, telecoms and internet software continued strong expansion in May, according to the NBS.

The service sector includes finance, real estate services, marketing, transportation and retailing. Also known as the tertiary sector, it accounts for over half of China's economy. And the government is counting on growth in services and consumption to rebalance economic expansion from its heavy reliance on investment and exports.

Meanwhile, Caixin’s composite PMI covering both the manufacturing and service sectors also remained steady in May at 52.3, suggesting economic growth remains relatively resilient.