China services sector grows for fourth month "We believe the government cannot further loosen policies given inflationary pressure, as growth may weaken beyond Q1 as policy easing runs out of steam," Zhang said. The NBS said in a statement that the retail, air cargo and shipping sectors all reported levels of activity above 60 in January, though the construction sector, one of the big drivers of growth in December, ticked down slightly to 61.6 from 61.9. The new orders index fell to 53.7 from the previous month's 54.3, showing a slowdown in demand even though the overall figure remained well above the 50 mark separating growth from contraction. The intermediate input price index jumped to 58.2 from 53.8 last month, indicating rising costs for enterprises, with a big rise in costs the construction sector. The marginal rise in the services PMI is consistent with the view of many economists that recent data signals a modest recovery for China and that steady policy support may well be needed to keep it on track. A Reuters poll last month showed that China's economic growth is likely to edge up to 8.1 percent in 2013 from 7.8 percent last year, which had been the economy's slowest growth since 1999. But the recovery could fizzle in 2014 as a pick-up in inflation forces the central bank to revert to modest policy tightening, the poll found. The services sector generated 44pc of China's GDP in 2011, up from 35pc in 2000, and Beijing has acknowledged that greater consumer activity is needed to reduce the economy's reliance on exports and investment-led growth. The services industry has so far weathered the global slowdown much better than the factory sector, with the PMI consistently signalling healthy expansion and hitting a 10-month high of 58.0 in March. That is partly due to a maturing economy as well as a historic shift in the last decade leading a majority of Chinese to live and work in cities rather than the countryside. The January index of expected activity also fell from December, but remained above 60, indicating that service sector enterprises continued to be optimistic, the bureau said.