FRANKFURT, Sept. 21 (Xinhua) -- The Chinese economy made a relatively swift recovery after bottoming out in the first quarter of the year due to the COVID-19 pandemic, according to an article published by the European Central Bank (ECB) on Monday.
China's economic activity rose from a trough of around 20 percent of normal levels in February 2020 to 90 percent in the span of just three months, ECB analysts said in the article, citing both traditional data and non-conventional high-frequency economic indicators.
The article found that the manufacturing sector rebounded earlier than the services sector. While the manufacturing and construction sectors returned to almost full capacity in the course of May, services sectors such as tourism, business travel, and cultural and sporting events that are associated with close physical interaction, remained below pre-outbreak capacity.
The article also said that some domestic demand components are showing signs of strengthening. It highlighted automobile sales growth, which may reflect a shift away from public transport for private customers, as well as a rise in sales of commercial vehicles such as trucks and construction vehicles amid increasing infrastructure spending.
In the near term, China's economic prospects will depend on the resilience of domestic demand in the presence of increased uncertainty and on developments in the external environment, including the recovery of major trading partners, the analysts said.
Uncertainties remain as to the curve of COVID-19 infections in the fall and winter and the availability of the medical solution, the article noted. Additionally, pandemics could have long-lasting effects on the economy through increased precautionary saving and fewer investment opportunities, it said.
"In view of China's increasing role in determining global growth, the uncertain factors surrounding China's recovery are of utmost importance for the world's economic outlook," the article concluded.