China’s service sector expanded in October at the fastest pace in 12 months, confirming that the Chinese economy is on a path to stability. The non-manufacturing Purchasing Managers’ Index rose to 56.3 in October from 55.4 in September, the official National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. A reading above 50 indicates expansion. The index covers non-manufacturing activities such as service, construction, software, aviation, railway transport and real estate. The improving non-manufacturing figure is in line with China’s manufacturing PMI, which hit an 18-month high in October, according to NBS figures released on Friday. Cai Jin, CFLP vice chairman, said the construction and service sectors are becoming increasingly active, and the non-manufacturing sector is absorbing more jobs. But he warned about pressure from a slowing expansion in new orders and rising prices. “New orders keep expanding but the speed slows down,” Cai said. “The sub index for prices picked up, indicating pressure is rising though the trend is mild and controllable. We expect non-manufacturing expansion to remain positive in the coming months.” The sub-indices for business activity in the construction sector gained 0.5 percentage point to 62 percent in October. The service sector rose 0.9 percentage point to 54.8 percent. “The non-manufacturing sector is now important in supporting the steady growth of the economy,” said Cai. More companies in the non-manufacturing sectors expect their business to grow in the coming three months, with the business confidence index hitting 60.5 percent in October, up 0.4 percentage point from September, the bureau data showed. The sub-index for new orders fell by 1.8 percentage points to 51.6 percent in October. Cai said although the index remained in the growth territory, market demand was not rising as fast as that in the previous month. The new order indices for the leasing, business service, catering and real estate sectors even fell below 50 percent. “More supportive measures should be in place to nurture the growth of the market,” said Cai. The Chinese economy grew by 7.7 percent in the first nine months, above the full-year target of 7.5 percent. Economic growth in the third quarter accelerated to 7.8 percent from 7.5 percent in the second quarter, data showed.