China's service activity cools in June

China's service activity slowed down for the second consecutive month in June as the country continued its tightening monetary policies, an industry group said Sunday. The Purchasing Managers Index (PMI) for China's non-manufacturing sector came in at 57 in May, down from 61.9 a month earlier, according to the China Federation of Logistics and Purchasing (CFLP). A reading of 50 or above represents an expansion of the sector compared to the previous month while a reading lower than 50 represents a contraction. The non-manufacturing sector accounts for less than 45 percent of China's economy. The PMI for non-manufacturing sector was 62.5 percent in April, 60.2 percent in March, 44.1 percent in February and 56.4 percent in January. The CFLP attributed the decline largely to China's recent efforts to cool down its economy.  In 2010, China's economy expanded 10.3 percent, up from 9.2 percent the previous year, despite the country's monetary tightening to tame inflationary pressure. China's economy continued to maintain strong momentum in the first quarter of this year, growing 9.7 percent. In May, China's consumer prices rose 5.5 percent from a year earlier to a 34-month high. It was an increase of more than 5 percent for the third straight month. Market watchers expect that consumer prices rose 6 percent or even higher this month, spurred by the country's soaring pork and vegetable prices. The Chinese government is expected to continue to maintain its tightening measures, putting its top policy priority on reining in runaway inflation. In April, the People's Bank of China, the central bank, raised the benchmark interest rate for the second time this year, in a bid to curb rising prices. It has also hiked the deposit reserve requirement ratio for its major banks six times so far this year.