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China February service sector growth slows to four month low Caixin PMI


BEIJING, Activity in China's services sector expanded at the slowest pace in four months in February, with new business still growing at a solid rate but increasing competition making it harder for companies to raise prices, a private survey showed. The findings echoed a similar softening in growth in China's official services activity survey released on Wednesday, and contrasted with an unexpected pick-up in growth in its manufacturing sector as export orders rebounded. The February services PMI dipped to 52.6 in February on a seasonally adjusted basis, from 53.1 in January, the Markit/Caixin services purchasing managers' index (PMI) showed. While it remained well above the 50-mark that separates expansion in activity from contraction on a monthly basis, it was the slowest rate of expansion since October. Any signs of flat-lining in services sector growth, which is more dependent on domestic demand, could indicate a slowdown in momentum for the economy overall. Some analysts say domestic demand growth already may have plateaued. That could put policymakers in a dilemma on how to meet ambitious growth targets while also containing financial risks created by years of debt-fueled stimulus.

The central bank has gradually moved to a tightening bias in recent months, as a string of data showed the world's second-largest economy was on steadier footing. The Chinese government will hold annual parliamentary meetings starting this weekend, where leaders will announce an economic growth target and other policy priorities, including potentially a slightly lower target for economic and money supply growth and an emphasis on managing debt risks. Though inflation in January rose to multi-year highs, the Caixin survey found that prices Chinese firms were able to charge their customers were little changed.

Survey respondents said increased competition had restricted their pricing power, even as their input prices continued to rise, albeit at a slower pace."Inflationary pressures seemed to have started to ease as price increases in both manufacturing and services continued to weaken," said Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group, in a note with the data. Service companies continued to add job at a solid pace, and remained optimistic about growth in the next 12 months.

Caixin's composite PMI covering both the manufacturing and services sectors rose to 52.6 in February from the previous month's 52.2 as growth in the manufacturing sector accelerated."The Chinese economy is expected to maintain the growth momentum in the first quarter of this year. But signs of weakening may emerge from the second quarter," said Zhong.

Norwegian Air steps up transatlantic pressure with $65 fares


Norwegian Air Shuttle ASA (NWC. OL) on Thursday announced plans to offer transatlantic flights on 10 new routes between the United States and Europe starting at $65, ramping up pressure on U.S. and European rivals. Norwegian is expanding its network of flights to the United States from mid-June after receiving long-awaited approval late last year for its Irish subsidiary to operate routes across the Atlantic. Efforts by Norwegian and Icelandic rival Wow Air to offer cut-price tickets across the Atlantic have long been protested by established U.S. carriers that have been forced to consider offering cheaper fares with more restrictions and redesigning cabins to win budget-conscious travelers. Norwegian's $65 fares will be for one-way tickets to UK and Irish destinations from New York, Providence and Hartford in the United States."I pay for what I want, you pay for what you want. We don't pay for what everybody else on the plane wants," Norwegian Air spokesman Anders Lindström said of its fares. The burgeoning competition on transatlantic routes has also prompted action by more established European airlines.

British Airways-owner IAG (ICAG. L) is planning to start low-cost transatlantic flights from Barcelona this year and CEO Willie Walsh said this month that the Norwegian carrier's model had pushed IAG to look at new ways to operate. IAG reports annual results on Friday. Meanwhile, Air France, part of Franco-Dutch group Air France-KLM (AIRF. PA), is also pushing forward plans for a new low-cost unit, in a project dubbed Boost, while Lufthansa (LHAG. DE) is expanding long-haul budget flying through its Eurowings business. Norwegian Air's expansion strategy has helped it to more than double revenue since 2012. Last year revenue rose 16 percent to 26 billion Norwegian crowns ($3.12 billion) and the company has placed orders for 260 aircraft from Boeing (BA. N) and Airbus (AIR. PA), which it will receive over a period of several years.

The company said that thousands of one-way tickets will be offered at $65, with fares on the next pricing tier starting at $99. By comparison, prices for a one-way ticket from New York to Dublin in mid-June with other airlines range from about $655 to $2,755 on the Expedia travel website. To keep costs low, Norwegian said it will fly from smaller U.S. airports with lower fees, using narrow-body Boeing 737-MAX aircraft, which are due to be delivered later this year.

UPDATE 3-Dish Network profit tops estimates on surprise subscriber additions Feb 22 U.S. satellite TV provider Dish Network Corp reported a better-than-expected profit and added pay-TV subscribers in the fourth quarter as more customers signed up for its lower-priced Sling TV streaming service.

Airbus seeks new European help over A400M costs PARIS Airbus called on Wednesday for new talks with European governments to ease "heavy penalties" for delays to its A400M military aircraft, after taking a fresh 1.2 billion euro ($1.3 billion) charge for Europe's largest defense project.

China opposes U.S. naval patrols in South China Sea BEIJING China said on Tuesday it opposed action by other countries under the pretext of freedom of navigation that undermined its sovereignty, after a U.S. aircraft carrier strike group began patrols in the contested South China Sea.

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