China's service Purchasing Managers' Index rose to a five-month high of 52.8 in August, compared with 51.3 in July, HSBC reported on Wednesday. The average for the first half of the year was 52.3.

The acceleration of service activities in August was because of the rapid growth in new businesses, while output prices saw a moderate increase, the bank said.

"A filtering-through impact of value-added tax reform, combined with a rebound in manufacturing activity growth, is expected to continuously support service industry growth in the coming months," said Qu Hongbin, chief China economist at HSBC.

According to the report, new businesses in the service sector recorded a five-month high of 53.2 in August, up from 52.3 in July, while future business expectations hit 62, also a five-month high, reflective of improving demand.

HSBC economist Ma Xiaoping said that service sector activities are likely to find support from the rebound in the property market, which speeds up investment and land purchases and seasonal spikes in consumption in the coming months.

The official non-manufacturing PMI, which covers both services and construction sectors, edged down to 53.9 in August from 54.1 in July, the National Bureau of Statistics and the China Federation of Logistics and Purchasing said on Tuesday.