China's private and export-oriented firms saw service activity grow at the slowest pace in 20 months in April, pointing to further evidence of a fragile recovery in the world's second-largest economy, a survey showed yesterday.[Hong Kong company registration]

The HSBC Business Activity Index, a gauge of operating conditions in private and export-oriented service companies, stood at 51.1 in April, down from March's 54.3 and was the slowest rate since August 2011.

A reading above 50 means expansion. The latest reading signaled only a marginal increase in the service sector activity, the survey said.

Qu Hongbin, chief economist for China at HSBC, said the cooling of service sector activity in April reflected the knock-on effect of slower manufacturing growth, the impact of property tightening measures and the spread of the bird flu disease.

[Set Up Company Hong Kong]"All these are likely to add some risks to China's growth in the second quarter, as there is still a bumpy road toward sustaining growth recovery," Qu said.

Behind the slower rise in activity was weaker new business growth. The component indices showed that new orders grew at the smallest pace in 20 months, while staffing levels in the service sector fell for the first time since January 2009.

Xue Jun, an analyst at CITIC Securities Co, said private firms are more vulnerable to changes in the economic conditions and the HSBC reading showed the index retreating by a larger margin compared with that measuring the state-owned enterprises.

The Non-manufacturing Purchasing Managers' Index, which gauges conditions in largely SOEs, lost 1.1 points from a month earlier to 54.5 in April, the China Federation of Logistics and Purchasing said last Friday.

"Both indicators point to weakening growth momentum in China, and it is time for the authorities to roll out new supportive measures," Xue said.

But Chang Jian, an economist at Barclays, said China's new leaders appear to support slower growth with the need to foster new growth drivers.[Hong Kong Company Formation]

China's economy grew 7.7 percent in the first three months of 2013, slowing from 7.9 percent in the final quarter of 2012.