Investing.com-- China’s services sector expanded in December at the fastest pace in seven months supported by higher domestic demand, although export businesses declined, private purchasing managers index data showed on Wednesday.

The Caixin services PMI came in at 52.2 in December, compared to expectations for a print of 51.4. The reading was higher than the 51.5 seen in November.

A reading above 50 indicates expansion, with services activity now expanding at its fastest pace since May 2024.

"According to service providers, promotional efforts and better underlying demand supported the latest increase in new sales. Sales growth was notably supported by higher domestic demand as new export business declined for the first time since August 2023 amid softening foreign interest," the Caixin report stated.

Recent PMI data showed the manufacturing sector expanded at a slower than expected pace in December, implying the effect of stimulus measures was waning. 

China has committed to implementing more proactive fiscal stimulus measures and adopting moderately looser monetary policies in 2025.

U.S. President-elect Donald Trump has threatened to impose steep import tariffs against the country when he takes office on January 20- a scenario that could herald more economic pressure. 

Beijing is expected to roll out more targeted, fiscal stimulus in response to Trump’s tariffs this year. Recent reports suggested that the country will lower interest rates to ramp up fiscal spending, in order to support economic growth.

"Sentiment in the Chinese service sector remained positive at the end of 2024 as firms were generally hopeful that business development efforts and supportive government policies can support sales growth in 2025," the report said.