BEIJING - China's service sector growth cooled slightly in July but remained in expansionary territory, a private survey showed Thursday.

The Caixin General Services Purchasing Managers' Index (PMI) fell to 51.5 in July from June's 51.6, according to the survey 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.

This came after an official survey showed China's non-manufacturing sector expanded at a slightly slower pace, as the index for the service sector stood at 53.1 in July, down from 53.8 in June.

The official survey samples 4,000 relatively large non-manufacturing companies, while the Caixin survey has a smaller sample size of over 400 companies and mainly focuses on small and medium-sized firms.

Caixin said that activity in China's service sector softened in July as growth in new business weakened and hiring was sluggish.

The subindex of new orders fell for a second month, edging down to 51.8 after a large drop to 51.9 in June from 53.5 the previous month. July's number was the lowest reading since February 2016.

Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group, said that growth momentum in the world's second-largest economy was "stronger than expected" at the start of the third quarter "mainly due to sustained recovery in the manufacturing sector."

However, "downward pressure on the economy remains as the index gauging companies' confidence about the 12-month business outlook dropped in both the manufacturing and service industries," he said.

The service sector -- which includes finance, real estate services and marketing, transport and retail -- has become an increasingly important part of the Chinese economy as the country tries to shift its economy toward a growth model that draws strength from consumption, services, and innovation.

The sector accounted for more than half of the Chinese economy last year.