China: its services sector slows at the weakest pace in 22 months
WHAT HAPPENED
The growth of services in China has slowed: a survey fell from 54.1 points in June to 50.4 in July, its lowest level in 22 months. It remains above 50, but factories are in contraction at 49.2.
WHY IT MATTERS
Domestic demand weakened, first affecting restaurants, tourism, transportation, and trade. As China buys iron, copper, and soy to produce and sell, a slower economy may reduce demand and pressure global prices of those raw materials.
AND FOR YOUR PORTFOLIO
For a long-term portfolio, China matters even if one does not invest there: its lower activity can affect companies linked to mining, energy, transportation, and agricultural exports. In daily life, it can also move prices of raw materials and currencies of exporting countries.
💬 TELL IT LIKE THIS
“China is not only cooling its factories: it is also losing strength in restaurants, tourism, and transportation, its two economic engines at the same time.”