China service sector pmi
A woman walks past a van which has been converted into a stall selling nail polish on a sidewalk in Beijing, June 4, 2013. Reuters

Expansion in China’s service sector slowed in September with the HSBC purchasing managers’ index, or PMI, released by Markit on Tuesday, was pegged at 52.4 in September compared to 52.8 in August.

HSBC's composite PMI for the country, which covers both manufacturing and services sectors, recorded a reading of 51.2 in September and down from 51.8 in August, as growth in new orders declined.

“China's services activity growth appears to be stabilising at a faster pace than in 2Q. This led to a renewed expansion of employment from the contraction in August,” Hongbin Qu, head of Asian economic research at HSBC, said in a statement.

“Combined with the gradual improvement of the manufacturing PMI, the Chinese economy is still on the way to a modest recovery. But a more consolidated and sustainable recovery requires structural reforms," Qu Said.

Employment levels in manufacturing dropped for the sixth straight month in September, although the rate of job shedding was moderate and remained broadly same as it was in August. In the service sector, jobs marginally increased after a reduction in August.