The HSBC China services Purchasing Managers' Index fell to 50.9 in December from 52.5 the previous month, HSBC Holdings PLC said on Monday.
A reading above 50 indicates on-month expansion and a reading below indicates contraction. The moderation of the headline services PMI reflected slower new business growth, HSBC's chief economist for China, Qu Hongbin, said in a statement, according to Nasdaq.com.
New order growth reported by the service providers in December was the weakest in six months. However, HSBC said that the services sector saw an increase in payroll numbers for the fourth straight month.
"We expect the steady expansion of manufacturing sectors to lend support to service sector growth," Qu noted. China's official nonmanufacturing PMI fell to 54.6 in December from 56.0 in November, according to a Friday statement from the China Federation of Logistics and Purchasing.
The HSBC China Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives at more than 400 private service-sector companies.