Tepid China services activity stokes slowdown worries The sub-index for construction fell to 59.3 from 62.2 in May.The CFLP conducts the official survey together with the NBS. China's services sector accounted for 46 percent of the economy in 2012. It overtook manufacturing as the biggest employer in the country in 2011 and so far service businesses have fared better than Chinese factories which are hurting from slackening foreign and domestic demand, as well as excess capacity. However, economists warned sooner or later the slackening of manufacturing activity and toughening economic conditions will also catch up with the service economy. "Employment will only worsen in the next few months, it won't improve," said Hao Zhou, an economist with ANZ in Shanghai. Company profits are declining and they are investing less. How can employment improve?" he added. Two separate PMI surveys on Monday showed China's manufacturing growth plumbed multi-month lows in June as foreign and domestic demand waned. China's economic downturn, shaping up to be the worst in at least 14 years, is starting to bite. Many analysts believe the economy is backsliding into another downturn after a short-lived recovery lasting only around three months, with growth possibly even missing Beijing's 7.5 percent target this year. An increasing show of reluctance by top Chinese leaders to take policy steps to stimulate growth has also raised the chance that China's economic downcycle may turn out worse than thought. Indeed, an unprecedented cash crunch in China's financial markets last month, that saw interest rates briefly spike to record highs, may further drag on the economy in coming months. The offficial services PMI showed new orders picked up to 50.3 in June from May's 50.1 and a sub-index measuring employment rose to 51.5 from 51.3 in May. However, in the HSBC survey, the reading for new orders fell to 50.5 in June, the lowest since November 2008. "With sluggish growth of new orders, employment growth is under pressure," HSBC's Qu said. "Growth in the services sector slowed, but didn't slide," said Wei Yao, China economist of Societe Generale in Hong Kong. It explained why the labour market has so far remained healthy. "It ... leaves Beijing more room to tolerate economic slowdown and press ahead with structural reforms," she added. China's President Xi Jinping said over the weekend that officials should no longer be evaluated against economic growth but with consideration to other indicators including welfare and ecological improvements and social development.