Services sector expands with manufacturing

A sub-index measuring new business jumped to 53.8 in June, the strongest expansion since Jan 2013, which suggested the domestic economy has regained some internal strength following the government's stimulus measures.

China's April services growth quickens slightly

China June HSBC PMI shows first expansion in six months

China has stepped up policy support in recent months to ensure that the slowing economy does not slip below the government's bottom line. Some of the measures unveiled by the government include targeted reserve requirement ratio cuts for some banks, quicker fiscal spending and hastening construction of railways and public housing projects.

A sub-index gauging business sentiment picked up slightly in June from May's 11-month low, though the reading remained weak in the context of historical data.

Stronger orders and the improving business outlook prompted services firms to hire more workers last month, as indicated by the employment sub-index, which rose to a three-month high.

The official PMI data also showed strong confidence among companies (60.4), although it dipped a bit over May, along with a drop in new order growth.

Analysts said the services sector has become a bastion to ensure China's employment despite a slowdown in the broader economy. Although China's GDP growth has slowed to a 18-month low of 7.4 percent in the first quarter, employment has been little affected.

China created 6 million new jobs during the first five months of the year, making it easier to achieve the government target of adding 10 million new jobs for 2014. The surveyed unemployment rate fell to 5.07 percent in May from 5.15 percent in April, Premier Li Keqiang said in June.

The services sector has steadily expanded in recent years and stood at 46 percent of China's GDP in 2013. It rose to 49 percent in the first quarter.