China's official non-manufacturing PMI grew at the quickest rate in 13 months in October, rising to 56.3 from 55.4 in September.
The increase adds to an improving manufacturing sector and provides further evidence that China's economy has stabilized.
However, the new orders sub-index dropped to 51.6 from 53.4, while activity in commercial services, the food and drinks industry, and real estate contracted.
"The non-manufacturing sector should continue to develop at a stable rate over the next few months, although there still needs to be more market training and promotion to further release the service sector's potential," the government said.
At a meeting next weekend, China's leaders are expected to unveil reform to strengthen the sector and open it up to foreign competition. (PR)