The Chinese services sector purchasing managers' index for the month of September fell to 53.7 from 56.3 in the month before, according to the latest data from the National Bureau of Statistics and China Federation of Logistics and Purchasing.

Readings above 50 indicate expansion.

Following on from the above, some market commentary has caught on to the fact that the Asian Development bank (ADB) has this morning cut its forecast for economic growth in the People's Republic of China (PRC) in 2012 to 7.7% this year (from the 8.2% rate previously forecast), although a rebound to a rate of expansion of 8.1% is foreseen for 2013.

Even so, remarks the ADB, "Fortunately, most developing Asian economies have room to counteract such shocks with fiscal and monetary policy. However, there is currently no regionwide need for countercyclical policy intervention." Simply put, there would seem to be little sense of urgency in this corner of the world, and perhaps rightly so, comment analysts at Digital Look.

The consensus estimate is for China's economy to expand at a rate of 7.4% in the third calendar quarter of this year, following an expansion of 7.6% in quarter two.

Very much worth pointing out, today's services data is thought to be considerably less reliable as a forward looking indicator for the economy as a whole than comparable surveys for the manufacturing sector.

Lastly, economists at Nomura were this morning pointing out that, "As our Chief Asia Economist Rob Subbaraman notes, the non-manufacturing PMI is a gauge of the services sector and consumer demand which is a lagging indicator of the recovery that we expect in China‟s GDP growth this quarter."

AB

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