The Caixin/Markit Services Purchasing Managers' Index (PMI) for China rose to 52.4 in January from 50.2 in December.

The index was driven by a rise in new business.

"Overall, the fast development of the services sector has to a large extent offset the impact of weakening manufacturing, indicating a better economic structure. The government should continue to deepen reform, relax administrative controls and reduce restrictions on market entry for service providers. This will release the potential of the services sector and help improve the economic structur," Dr. He Fan, Chief Economist at Caixin Insight Group, said.