China's service sector cooled in January, according to a private survey that focuses on the country's small and private services.

The pace of growth in the country’s service sector slowed to 53.1 at the beginning of the new year, after December's fastest growth in 17 months at 53.4, according to the Caixin General Services Purchasing Managers’ Index (PMI).

The service sector’s expansion was attributed by rise of new businesses, the survey says, despite the rate of expansion slowing from that seen at the end of 2016. However, the report says that there were increased capacity pressures for the service providers, due to higher new orders in January, while prices kept rising, the survey says. 

Analysts are concerned that inflation pressure is increasing, and the economy may not expand as fast as the fourth quarter of 2016. 

Analysts said that although the data pointed to a relatively good start for the economy in 2017, China faces a string of uncertainties and should be wary of downward pressures.

Meanwhile, slowing increases in manufacturing has also been signaled, which is in line with the official PMI released last week. The manufacturing data was 51.3 in January, down slightly from 51.4 from the month before.

"The economy is unlikely to maintain the pace of expansion seen in the fourth quarter of last year, given that the manufacturing sector's willingness to restock has declined," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group.

The country's economy expanded by a stronger-than-expected 6.8 percent in the last quarter of 2016, picking up from a gain of 6.7 percent in the January-September period.