Workers produce medical protective goggles at a factory of a company in Helong, Yanbian Korean Autonomous Prefecture, northeast China's Jilin Province, May 6, 2020. Epidemic prevention materials production companies in Helong have been producing medical supplies at full capacity to meet domestic and foreign demands during the fight against the novel coronavirus epidemic. (Xinhua/Xu Chang)

The Caixin services Purchasing Managers Index (PMI), a gauge of activity in China's services sector, hit a 10-year high of 55 in May, reflecting great improvement in the country's services sector amid relaxed coronavirus prevention measures.

The May figure is 10.6 points higher than in April and is expanding for the first time since February.

Caixin's survey showed a stronger rebound in services sector than official data released on Sunday, which stood at 52.3 in May, up 0.2 points month-on-month.

Last month saw the services new order index re-enter the expansion zone, driven by growing domestic demand. But the new export order index remained in the contraction territory with a narrowed decline, according to Caixin.

Due to excess capacity and increased efficiency, companies in the services sector continued to cut labor in May but reported the smallest drop since February.

Last month, the Caixin manufacturing PMI also returned to the expansion territory at 50.7, up 1.3 points month-on-month, sending the comprehensive PMI index up to 54.5 in May, its highest since February 2011.

Wang Zhe, senior economist with the Caixin think tank said the country's services sector has accelerated its recovery from the impact of COVID-19, while the recovery of market demand is stronger than that of manufacturing. However, it will take time before the recovery can totally hedge the shocks brought on by the global pandemic, Wang said.

To spur domestic consumption and guarantee employment, China has released a slew of measures like encouraging the return of street vendors and issuing cash coupons.

By the end of May, a handful of cities including Zhengzhou in Central China's Henan Province, Changsha in Central China's Hunan Province and Qingdao in East China's Shandong Province loosened regulations on street vendors. Chinese Premier Li Keqiang said at a press conference on May 28 that a city in China's western region, in keeping with local rules and regulations, set up 36,000 mobile stalls, adding some 100,000 new jobs overnight.

As the country's largest mid-year shopping festival, "618," officially kicks off on Monday, Alibaba-backed Tmall issued a total of 4 billion yuan ($563 million) worth of cash coupons to spur consumption.