China's private sector activity expanded at the quickest pace in seven years in January, survey data from IHS Markit showed Monday.
The Caixin composite output index, which covers both manufacturing and services, climbed to 53.7 in January from 53.0 in December.
Any reading above 50 indicates expansion in the sector.
Service sector activity grew at the fastest pace since May 2012. The seasonally adjusted General Services Business Activity Index rose to 54.7 in January from 53.9 in the preceding month.
At the same time, manufacturers signaled the quickest upturn in production levels since December 2016.
Composite employment rose slightly, after broadly stagnating between August and December last year.
"Caixin PMI readings in January showed that the Chinese economy had a good start to 2018," Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said.
"Looking forward, we should watch for stability of demand in the manufacturing industry and the impact of growing costs on the profitability of service providers."