The upbeat findings broadly echo those of an official gauge of the non-manufacturing sector last week that showed activity accelerated at a faster rate in December than the previous month, reinforcing the view that an expected slowdown in the broader economy would be gradual.
The Caixin/Markit services purchasing managers’ index (PMI) rose to 53.9 in December, from 51.9 in November and the highest reading since August 2014.
A reading above 50 indicates growth, and a reading below signals contraction on a monthly basis.
New business increased at the fastest pace since May 2015, with survey respondents reporting sales supported by strong underlying client demand and new projects.
China’s leaders are counting on growth in services and consumption to rebalance economic expansion from its heavy reliance on investment and exports.
The services sector accounts for over half of the economy, with rising wages giving Chinese consumers more spending power at home and abroad.
The survey also showed input price inflation for services firms in China in December matched March’s reading at 53.8, higher at 51.7 in November.