The Purchasing Managers' Index (PMI) for China's non-manufacturing sector rose to 60.1 percent in July, up 2.7 percentage points from the previous month, the China Federation of Logistics and Purchasing (CFLP) said here Tuesday.

The non-manufacturing PMI includes a package of indices to measure the non-manufacturing sector's performance. A reading above 50 percent indicates economic expansion, while one below 50 percent indicates contraction.

The July rise in the index came after two successive monthly drops and was the fifth straight month the reading was above 50 percent.

The new orders index jumped to 55.8 percent in July, 2.9 percentage points higher than June, the CFLP said, reflecting robust demand in retail and catering services.

"The index for the real estate industry swung back to a level above 50 percent," said Cai Jin, deputy chairman of the CFLP.

Jin also urged the government to adhere to its policy of striking a balance between stable and relatively fast economic growth and the adjustment of the economic structure and the management of inflation expectations.