A reading above 50 indicates expansion in service-sector activity, while a reading below that shows a contraction.
"The HSBC China Services PMI suggests that service sector growth seems to be stabilising at a relatively low level. However, combined with the weaker manufacturing PMI, the overall strength of economic growth is moderating and this is starting to weigh on employment growth," HSBC chief economist for China Qu Hongbin said in a statement.
"Beijing policy makers can and should fine-tune policy to avoid growth deceleration in the first half of the year," he added.
China's official non-manufacturing Purchasing Managers' Index rose to 55.0 in February from 53.4 in January, according to a statement Monday from the China Federation of Logistics and Purchasing.