By Koh Gui Qing
BEIJING (Reuters) - China's services sector grew at its slowest pace in eight months in September after new orders shrank for the first time since the 2008 global financial crisis, a survey showed on Friday, exposing more weakness in the world's second-largest economy.
The official non-manufacturing Purchasing Managers' Index (PMI) edged down to 54.0 in September from 54.4 in August, the National Bureau of Statistics said, but still well above the 50-point mark demarcating growth on the month from a contraction.
In a sign that China's cooling property market remained a key drag on the economy, the PMI showed the real estate sector shrank in September, alongside other industries such as logistics and aviation.
Lacklustre activity in the housing sector weighed on overall new orders, which fell to 49.5, a level not seen since December 2008 and down from 50 in August.
"The 'Golden September' peak season in the property sector did not materialise. The market tracked a weak trend and activity was on the subdued side," said Wu Wei, an official at the China Federation of Logistics and Purchasing, which helps to publish the PMI.
Friday's data raised questions about whether China's move this week to cut mortgage rates and down payment levels for some home buyers would be enough to revive its sagging housing market and rejuvenate its sputtering economic momentum.
Indeed, the PMI showed the property, aviation, catering and environmental protection industries all took in fewer orders last month.
Overall slack caused employment in the sector to shrink for the third consecutive month as a sub-index for jobs inched down to 49.5 from 49.6 in August.
China's slowdown risks are undermining the lift to the Asia region from a stronger U.S. economy, Hak Bin Chua, an analyst at Bank of America Merrill Lynch, wrote in a research note. Its cooling import demand is also disproportionately hurting Asian commodity exporters such as Indonesia and Thailand, he added.
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Financial markets in China are shut for the "Golden Week" National Day break and will resume trading on Oct. 8, though shares of Chinese property developers rose in Hong Kong on Friday on hopes the new measures will revive sales.
So far, it is not clear whether reduced mortgage rates would succeed in turning the housing market around, but early reports in the Chinese media suggest the move has piqued buyers' interest.
Some Chinese have cancelled their holiday plans for "sudden showroom visits", said the Shanghai Morning Post. It quoted a property broker as saying that he started getting enquiries from potential home buyers from Tuesday evening, when China lowered mortgage rates.
Accounting for about 15 percent of China's gross domestic product, the housing market affects 40 other sectors from glass to cement to electronic appliances.
The government's move this week to relax lending standards for mortgages would be welcomed by investors who worry China's economy is cooling too fast. But at the same time, it would disappoint millions of Chinese who feel that home prices are still far too unaffordable, despite the recent price declines.
Many analysts expect further support measures to be announced in coming months to shore up the most vulnerable sectors of the economy if conditions do not stabilise.
Services made up about 46 percent of China's economy in 2013, having overtaken manufacturing as the country's biggest employer in 2011. The government hopes to grow the sector further to overtake manufacturing as the bigger engine of the economy.
(Editing by Michael Perry & Kim Coghill)