China's services industry expanded in October 2013, with new businesses and more employment opportunities poised to drive the economy toward its growth agenda in the next months. 

In the latest HSBC/Markit China Composite PMI data, which covers both manufacturing and services, the China Services Business Activity Index posted a growth from 52.4 in September to 52.6. In the report, the firm said that while the increase was modest, the rate of activity growth was one of the fastest in 2013.

Wealth managers, who have been wary of China in recent months due to deceleration of its GDP growth and concerns about US central bank reductions in money creation, or tapering, are closely watching Chinese data for signs of how far, or fast, any shift is taking place. In particular, a long-standing issue has been how China, now the world's second-largest economy, is moving towards a more domestically-driven source of growth with less stress on exports of manufactured goods.

"Service sectors saw modest but broad-based improvement into Q4, as greater volumes of new business translated into the second consecutive expansion of employment. Service sectors are likely to find support from the ongoing recovery of manufacturing growth and signs of improving labour market conditions," said Hongbin Qu, chief economist for China and co-head of Asian Economic Research at HSBC.

New business rose at both manufacturers and service providers in October, with new business increasing for the third successive month at the composite level. Employment at services also grew for the second consecutive month. Firms operating in the service sector were optimistic on the business outlook for the next 12 months, generally expecting activity levels to be higher in a year. 

The China Services PMI covers hotels and restaurants, transport and storage, financial intermediation, renting and business activities, post and telecommunications and other services. Above 50.0 signals an improvement, while below 50.0 implies decline.