The HSBC China purchasing managers index (PMI) for the service industry in China stood at 53.3 in March, down from 53.9 the previous month.
The smaller PMI indicated the industry expanded at a slower rate last month, according to a report released by HSBC Thursday.
A reading above 50 indicates expansion, while one below this mark indicates contraction.
The report also said jobs created in the industry grew at the slowest pace in more than three years in March due to restructuring in the industry.
Meanwhile, the report said average service charges were higher last month as costs of fuel, transportation, and labor kept rising.
The PMI for the service industry has covered transportation, commercial services, individual services, computers, hotels, and restaurants in China.