Services sector expands at steady pace

The services sector continued to expand at a steady pace in May, with companies in the sector showing strong confidence in the economic prospects in a year's time, according to a private survey released on Tuesday.

Analysts said the survey results show that the Chinese economy remains on track, although policymakers should closely monitor the adverse effect of credit contraction on small enterprises. The Caixin/Markit Services Purchasing Managers' Index (PMI) stood at 52.9 in May, unchanged from April. The composite index, which combines both manufacturing and services PMI, was 52.3 last month, also unchanged from April. A reading above 50 indicates growth.

"The index of expectations regarding future output rose to a relatively high level, suggesting optimism across both the manufacturing and service sectors," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, in a statement released along with the data.