China's service sector sees expansion while production shrinks

China's factory activity shrank for the fourth consecutive month this August, while the service sector has expanded at a faster pace, official data showed on Saturday.

Data from the National Bureau of Statistics showed that China's official purchasing managers index for the manufacturing sector came in at 49.1 in August, down from 49.4 in July. This is below the 50-point mark that separates growth from contraction.

Zhao Qinghe, an NBS statistician, explained that the decline in the official manufacturing PMI was due to August being the traditional offseason for production for some industries. Other contributing factors included high temperature and heavy rainfall.

The sub-index for production was 49.8 in August versus 50.1 in July, while the gauge for new orders came in at 48.9, down from 49.3 in July, the NBS reported.

China's non-manufacturing PMI, which includes subindexes for service sector activity and construction, came in at 50.3 in August, up from 50.2 in July. Official services PMI meanwhile rose to 50.2 in August from 50 in July.

The country's official composite PMI, which encompasses both manufacturing and non-manufacturing activities, dropped from 50.2 in July to 50.1 in August, remaining in the expansion territory.