One more piece of economic data out of China added to an almost unbroken line of statistics which show its GDP, factory, and service activity have picked up sharply since a slump which lasted through the middle of last year. National Bureau of Statistics numbers showed that PMI for the non-manufacturing sector rose to 56.2 in January against 56.1 in December.

The one question which is not entirely answered is whether the growth is due to internal consumption of China’s huge middle class, or demand from overseas. Given the breadth of the global recession, it is hard to make a case for the latter.

According to Reuters

The marginal rise in the services PMI is consistent with the view of many economists that recent data signals a modest recovery and that steady policy support may well be needed to keep it on track.

“The economy should continue to recover moderately in 1Q13 on the back of the earlier acceleration in government-led infrastructure investment and the more recent recovery of real estate investment,” economists at China International Capital Corporation wrote in a note to clients after the manufacturing PMI numbers.

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