After the reported slight dip in the manufacturing sector's PMI, a reliable survey now discloses that China's service sector rate of growth in January is at its lowest in five years.

The statistics released on Monday by the National Bureau of Statistics showed that the January Purchasing Manager's Index (PMI) for the non-manufacturing sector is at 53.4, a 1.2 point drop from the December reading of 54.6.

Like Us on Facebook

Because of a slight decline in demand in both local and foreign markets, growth of factory output in January dropped slightly compared to the December reading of 51. Saturday's report from the National Bureau of Statistics showed a January rating of 50.5

The PMI also shows a decline in export orders and a slower growth rate in new orders. New orders sub-index dropped to 50.9 the lowest in the past six months while sub-index for export orders was also at its lowest in six months at 49.3, indicating contraction.

Analysts had cautioned before Saturday's release that the ongoing Lunar New Year holiday, which began on Jan 31, probably dragged on factory output in January as manufacturers shut shop for China's biggest annual holiday.

Analysts have already given a forewarning on the effect of Spring Holiday on factory output since a number of factories have suspended their operations during the holiday.

The slowdown of China's growth has created concerns that mirrored its effect on sluggish trading of global stocks on Monday.

The statistics on the service sector showed a decline in business expectations sub-index from December's 58.7 reading to 58.1 in January, the lowest since February of 2009.

Service sector's sub-index for new orders also showed a slight decrease from 51 in December to 50.9 in January.

Three sectors, however, did well and had output sub-indices above 60. These are the retail, rail and air transport sectors.

Both the input prices and prices charged indices also dropped in January with the former registering a 54.5 rating, the lowest in eight months and the latter with a 50.1 rating.

The growth rate of China's economy this year is expected by analysts to be at 7.4 percent.  This projected rate is lower than last year's and the lowest in the last 24 years.

Chinese Premier Li Keqiang has taken a step further to better improve government transparency by signing an enforcement regulation on the country's secrecy law.