The official non-manufacturing PMI fell to 53.1 in October, down from September's 53.4. Though still a fairly solid pace, it was the lowest reading since late 2008 during the global financial crisis, a similar survey showed.
A reading over 50 points suggests an expansion in activity while one below that level points to an contraction on a monthly basis.
China's factories continued to suffer from sluggish demand at home and abroad, which has saddled some firms with enormous amounts of idle capacity and forced them to cut prices, eating into profits.
As the first major indicators of business conditions in China released each month, the PMIs reinforced the view that the economy remains in the midst of a gradual slowdown which will require Beijing to roll out more support in coming months.
"While the PMI has stabilised, it is too early to confirm a bottoming out," economists at ANZ said in a note.
"As deflation risks intensify, a further RRR cut before end of this year is still possible," ANZ said, referring to reducing the amount of reserves that banks must hold in order to free up more funds for new loans.
New factory export orders contracted for a 13th straight month in October, though the sub-index for new orders - a proxy for both domestic and foreign demand - edged up marginally to 50.3, compared with September's 50.2.
Faced with persistently weak demand, factory owners continued to lay off workers and at a slightly faster pace than in September.
"Because of the recent weak recovery in the global economy and downward pressure in the domestic economy, manufacturers still face a severe import and export situation," Zhao Qinghe, a senior statistician at the NBS said in a statement accompanying the data.
Major Chinese construction machinery maker Sany Heavy Industry said on Friday it swung to a loss in the third quarter, affected by a glut of unsold equipment.
Data last week showed China's economy grew 6.9 percent between July and September from a year earlier, dipping below 7 percent for the first time since the global financial crisis, though some market watchers believe current growth is much weaker than government figures suggest.