The service sector continued to expand in February, but at a modest pace, according to an industry index released by HSBC on Wednesday.

The HSBC/Markit China Services Business Activity Index, which provides a snapshot of operating conditions in the sector, stood at 52 in February, up from 51.8 in January.

The index samples over 400 private service sector companies in China. A reading above 50 indicates expansion, while one below 50 indicates contraction.

HSBC said this signalled stronger growth of new business across monitored sectors in February with Chinese service providers seeing a solid increase in new work.

Annabel Fiddes, economist at Markit, said that the solid rise in new orders suggested that activity growth may pick up in the months ahead, as firms continued to create jobs amid a positive business outlook.

"The renewed improvement in manufacturing operating conditions suggests that the Chinese economy was on a steadier growth path in February," said Fiddes.

Chinese manufacturing activity also rebounded in February with HSBC's purchasing managers' index (PMI) for China hitting 50.7, beating the market forecast of 50.1 and higher than the preliminary figure of 50.1.