China's services purchasing managers' index (PMI) was posted at 52.3 in March, up from 52 in February, HSBC Bank (China) announced on Friday.
The data signaled a further expansion of business activity across China's service sector in March as the growth rate quickened to a three-month high, the HSBC said.
A reading above 50 indicates expansion, while a reading below 50 represents contraction.
However, the growth remained modest overall, the HSBC said, noting the pace of job creation eased to a marginal rate that was the weakest since May.
On Wednesday, the HSBC announced that China's manufacturing PMI fell to 49.6 in March, down from 50.7 in February.
Qu Hongbin, chief economist for China at HSBC, expected further policy easing as downward risks and deflation pressure remain due to subdued domestic need.
The National Bureau of Statistics announced on Wednesday that Chinese manufacturing bounced back to expansion territory with a reading of 50.1 in March after two months of bad news.
Official PMI covers large enterprises as well as small- and medium-sized enterprises (SMEs), while the HSBC poll is more focused on SMEs.
