The Caixin China Composite purchasing managers' index rose to 51.5 in May from April's 10-month low of 51.2 but was still the second-lowest since September 2016, IHS Markit said June 5.
The China General Services Business Activity Index rose to 52.8 in May compared with 51.5 in April; the highest reading in four months. The growth came after a rise in total new business on the back of stronger underlying client demand. Business optimism for the coming 12 months improved from April's five-month low.
Service sector jobs continued to rise in May although the rate of job creation was the slowest in nine months. Manufacturers also continued to cut staff numbers, resulting in the decline in composite employment for the second straight month.
The rate of input price inflation increased as a result of higher prices for raw materials and higher staff costs. May marked the 14th consecutive month of inflation in the services sector, IHS Markit said.