Customers shop at a duty-free shop in Haikou, capital of south China's Hainan Province, June 29, 2020. Hainan province will ease the limitations on duty-free shopping with the quota to be raised from 30,000 yuan (about 4,230 U.S. dollars) to 100,000 yuan per person per year, and provide more categories of duty-free commodities. The policy will come into effect on July 1. (Xinhua/Guo Cheng)

The Caixin services Purchasing Managers Index (PMI), a gauge of China's services sector activity, hit a 10-year high of 58.4 in June and beat market expectations, showcasing the revival of the nation's services sector following the COVID-19 impact.

The June index increased 3.4 percent from May, its highest recording since May 2010, according to a report released by Caixin on Friday.

The reading was well above the 50-point mark that separates expansion from contraction. The Caixin services PMI has remained in the expansion territory for two consecutive months.

"The recovery of the services sector shows the nation's overall economic recovery in the post-COVID-19 period," Liu Xuezhi, an economist at the Bank of Communications, told the Global Times on Friday.

The Caixin PMI figure is also in accordance with official data released by the National Bureau of Statistics, which showed the index of commercial activities in the services sector rose to 53.4 in June.

The official PMI focuses on large corporations and state-owned enterprises, while the Caixin/Markit survey covers a mix of small and medium-sized companies.

Compared with the manufacturing sector, services activities have seen a stronger recovery momentum with the coronavirus epidemic ebbing in the country, said Wang Zhe, senior economist at Caixin Insight Group.

Liu estimated the services sector would gradually warm up in the second half of the year based on good expectations for the market's revival.

"Offline services in the tourism and catering industries, which have been severely damaged due to the epidemic, are expected to recover later this year," Liu said.

Meanwhile, China is stepping up efforts to open up the services sector, especially in the financial industry, which will also help to drive recovery, according to Liu.

Export demand in the services industry is resuming, while external demand in the manufacturing industry continues to face some pressure, according to Wang.

Data released on Wednesday showed China's manufacturing activities have also rebounded.

The Caixin China General Manufacturing PMI, which offers an independent snapshot of the country's manufacturing sector, rose from 50.7 to 51.2 in June, its highest recording since December.

However, employment issues remain the top priority, said Wang, with manufacturing and services employment both shrinking in June.

To solve the unemployment problem, the government needs to introduce more targeted rescue measures at the micro level, in addition to the further promotion of the production resumption at the macro level, Wang said.