China's services sector expanded again in August on better domestic demand, adding to signs that the world's second-largest economy is recovering from a slowdown and is ready to meet its growth targets for 2013.

The National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CELP) said the country's official non-manufacturing purchasing managers' index (PMI) showed a reading of 53.9 in August, down from 54.1 in the previous month. A reading above 50 indicates an expansion in the sector.

Non-manufacturing PMI covers services sector that includes retail, aviation, software, real estate and the construction industries.

The services subindex declined half a percentage point in August from a month earlier to 52.5%, while another index for the construction industry rose a percentage point to 59.5%, according to the CFLP.

Industries that showed expansion include railway transportation, aviation, Internet and software, while sectors including postal services, property and road transport experienced contraction.

New orders continued to grow on higher domestic demand, with a subindex rising 0.6 points on the month to 50.9 in August. Meanwhile, the business expectations subindex declined to 62.9 in August from 61.9 in July.

Manufacturing Expansion

Service sector growth comes after two separate PMIs showed growth in the country's manufacturing sector, primarily due to the stimulus measures announced by the government.

The HSBC manufacturing purchasing managers' index (PMI) showed a final reading of 50.1 in August, up from an 11-month low of 47.7 in July.

Separately, the official manufacturing PMI showed the highest reading in the year at 51.0, up from July's 50.3.

China's gross domestic product increased by 7.8% in 2012, the worst performance in 13 years, and economists expected a further slowdown after the country posted growth rates of 7.7% and 7.5% in the first and second quarters of 2013, respectively.

Despite the lag, China's authorities were reluctant to announce big stimulus measures, but took steps to boost domestic demand.

The measures include lower taxes on small companies and more railway development. In August, China suspended value-added tax and the turnover tax for businesses generating monthly sales below 20,000 yuan ($3,257; £2,125).

China is also looking to help medium-sized private enterprises with measures including simplifying customs clearance procedures, reducing operational fees and facilitating exports.

China Set to Meet Goals

Chinese authorities are targeting a growth rate of 7.5% for 2013.

Speaking at the China-ASEAN Expo in Nanning, China, Chinese Premier Li Keqiang confirmed that the country will achieve its full-year economic goals.

"We are able to and have conditions to meet China's major economic and social development tasks this year," Li said.

"We are also determined to lay a sound foundation for next year, for the future and for long-term sustainable and healthy economic development."

Meanwhile, economists from Goldman Sachs lifted their 2013 China growth estimate to 7.6% from 7.4% on the back of recent positive economic indicators. Earlier, Credit Suisse, Deutsche Bank and JPMorgan Chase raised their yearly growth projections for China.