The purchasing managers' index (PMI) for China's non-manufacturing sector came in at 54.2 in July, down from 54.4 in June, the National Bureau of Statistics (NBS) said Friday.
A reading above 50 indicates expansion, while a reading below it reflects contraction.
The non-manufacturing PMI has remained above 50 for five months in a row, data from the NBS showed.
In July, the service sector sustained its recovering momentum, with the sub-index for business activities standing at 53.1, while the business expectation reading for the sector ticked up 2.4 points from the previous month to 61.4.
The accelerated restoration of the service sector was a result of local governments' pro-consumption policies that aimed to mitigate the impacts of the COVID-19 epidemic, said NBS senior statistician Zhao Qinghe.
The sub-index for the construction sector's activity rallied to 60.5 in July from 59.8 in June, returning to a relatively high expansion level, Zhao said.
Friday's data also showed the PMI of China's manufacturing sector rose to 51.1 in July from 50.9 in June.