Despite tightened liquidity, the growth of China's non-manufacturing sector rebounded in July, with an increase of the Purchasing Managers Index (PMI) for the sector, the China Federation of Logistics and Purchasing (CFLP) said Wednesday.

The index grew by 2.6 percentage points to 59.6 percent in July from a month ago. The figure had declined for two consecutive months. A reading above 50 indicates expansion from the previous month, while below indicates contraction.

The rebound implies the non-manufacturing sector is strengthening, said Cai Jin, CFLP vice president.

Almost all major indices rallied with new export orders up 2.9 percentage points to 56.5 percent and new orders up 2.1 percentage points to 55.6 percent. The business outlook edged down 0.8 percentage points to 67 percent.

The employment index climbed 2.3 percentage points to a historical high of 56.5 percent. This proves that the government's endeavors in "shifting development patterns, restructuring the economy and expanding the employment" are taking effect, Cai said.

The non-manufacturing PMI has stayed above the boom-or-bust line of 50, even though it declined 0.6 percentage points in May and tumbled 4.9 percentage points in June after reaching the peak of 62.5 in April.

That was much better than the PMI for the manufacturing sector, a more important indicator of China's economic health.

The manufacturing index fell to 50.7 percent in July, the fourth consecutive decline to hit a 29-month record low, CFLP said Monday.

China's inflation remained stubbornly high despite the government's efforts to rein in surging prices. In June, China's consumer prices jumped to a three-year high of 6.4 percent, with producer prices rising 7.1 percent, well above the government's target ceiling of 4 percent for the year.

The central government has declared curbing soaring prices its top priority this year and has hiked interest rates five times since October 2010 to cool the economy.