Business activity picks up in China's service sector

Business activity in China's service sector improved in October on stronger demand, but companies remained uncertain about the economic outlook, a private survey showed Wednesday.

The Caixin China General Services PMI (Purchasing Managers' Index) came in at 52 in October, up from 50.5 in September, but still below the historical average. The survey is conducted by financial information service provider Markit and sponsored by Caixin Media Co. Ltd.

A reading above 50 indicates expansion, while a reading below 50 represents contraction.

New business volume recovered slightly in October while employment growth accelerated to the highest rate in three months, according to the survey.

However, the survey showed uncertainties in China's economy dampened firms' outlook for the industry, with their confidence dropping to the lowest point in the past decade.

The rebound in the service data reflected the better structure of the Chinese economy and the effect of government support measures, said He Fan, chief economist at Caixin Insight Group.

"There were signs of the economy stabilizing and the pressure to maintain growth has been alleviated," he said. "The government should resolutely push forward structural reforms to tap long-term growth potential."

Chinese authorities have reduced interest rates, cut taxes and fees and ramped up fiscal spending since late last year to support economic growth sapped by tepid trade and investment.

The economy expanded 6.9 percent year on year in the third quarter of 2015, the lowest reading since the second quarter of 2009. Endi