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China’s service sector activity contracted at steepest pace in 2 years in March

Activity in China’s service sector contracted at the steepest pace in two years in March as the local surge in coronavirus cases restricted mobility and weighed on client demand, a private sector survey showed on Wednesday.

The Caixin services purchasing managers’ index (PMI) dived to 42 in March from 50.2 in February, dropping below the 50-point mark that separates growth from contraction on a monthly basis. The reading indicates the sharpest activity decline since the initial onset of the pandemic in February 2020.

The survey, which focuses more on small firms in coastal regions, tallied with the gauge of an official survey, which also showed the deterioration in the service sector.

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