The official services PMI rose to 54.1, from 53.5 in December, the National Bureau of Statistics said. The 50-point mark separates growth from contraction on a monthly basis.
Beijing has been counting on a strong services sector to help offset prolonged weakness in manufacturing, which has been weighed by weak domestic and global demand and the protracted U.S.-China trade war.
But analysts estimate the sector could take a severe hit from an outbreak of the new coronavirus, as shops, restaurants and movie theaters see a slump in sales as people avoid crowded areas.
The official January composite PMI, which includes both manufacturing and services activity, fell to 53.0 from December’s 53.4.
(Reporting by Lusha Zhang and Gabriel Crossley; Editing by Sam Holmes)