Growth in China's non-manufacturing sector picked up in July as Beijing's recent support measures for small firms helped improve sentiment, though companies noted that inflation is picking up and pushing up costs, official data showed on Saturday.
The government's non-manufacturing purchasing managers' index (PMI) rose to 54.1 last month from June's 53.9, the National Bureau of Statistics (NBS) said in a statement. A reading above 50 indicates activity in the sector is accelerating, while one below 50 indicates it is slowing.
The services sector index followed the bureau's manufacturing PMI on Thursday, which showed China's factory activity was slightly stronger than expected in July.
The latest data "indicate the non-manufacturing sector is improving, with the new orders sub-index consistently staying above 50, setting a good foundation in terms of demand for a stable growth," said Cai Jin, a vice head of the China Federation of Logistics and Purchasing, which compiles the index on behalf of the NBS.
"In general, the index pointed to a good start of the economy in the second half. Although there are still challenges, China has the foundation and conditions to maintain stable economic development," Cai added.
The services industry accounted for 46 percent of the Chinese economy in 2012, and overtook manufacturing as the biggest employer in 2011.
China's economic growth unexpectedly stumbled in the first half, as factory output and investment slowed.
To prevent it from slipping too far, Beijing has announced a series of targeted fine-tuning measures to safeguard growth. The politburo, China's top decision-making body, has pledged stable economic growth in the second half as it presses ahead with reforms and restructuring to make domestic consumption the main driver of economic growth.