05.08.202601:45:00UTC+00China’s Services Momentum Cools as July PMI Slips Toward Expansion Threshold

China’s services sector lost steam in July 2026, with the RatingDog Services PMI easing to 50.4 from 54.1 in June, signaling a sharp slowdown in activity growth. The latest reading, updated on 5 August 2026, leaves the index just above the 50-point threshold that separates expansion from contraction.

The June 2026 figure of 54.1 had pointed to solid expansion in China’s services industry, a key driver of the country’s broader economic transition toward consumption-led growth. However, July’s drop suggests that momentum has weakened noticeably, raising questions about the durability of the recent services-led recovery.

While the PMI remains in expansionary territory, the narrowing gap from the 50 mark indicates that demand conditions and business activity in the sector have become more subdued over the past month. Market participants and policymakers are likely to watch upcoming readings closely for signs of whether this is a temporary loss of pace or the start of a more prolonged cooling in China’s services economy.