Chinese officials at a press conference of the State Council on Friday. Photo: Li Xuanmin/GT

China's industrial output, investment and retail sales rebounded in April, the first full month after the world's second-largest economy resumed work and production after the worst of the coronavirus epidemic had passed in China. However, analysts warned that there would be mounting pressure to maintain the momentum given the persisting disruption of the COVID-19 pandemic on the domestic and international economies.

All three major economic indexes recovered from a steep decline in the first quarter. Industrial value-added turned to positive territory by growing 3.9 percent in April year-on-year, compared with a contraction of 1.1 percent in March, data from the National Bureau of Statistics (NBS) showed on Friday. The data beats an expected 1.1 percentage point gain.

Fixed-asset investment declined 10.3 percent in the first four months, narrowing 5.8 percentage point from the reading in the first quarter.

Retail sales shrank 7.5 percent as consumers returned to streets, restaurants and malls to release their pent-up demand but places like movie theaters remained closed amid the lingering pandemic.

China recently reported better-than-expected data for exports and financial direct investment. All these figures are being closely watched by analysts with the Two Sessions, a major event on China's political calendar during which policymakers will set this year's GDP growth target, scheduled to open next week. 

Liao Qun, chief economist at China CITIC Bank in Hong Kong, told the Global Times on Friday that the April data will be used by policymakers and analysts around the world to gauge the strength of the economy's recovery. 

"China was the first country to emerge from the pandemic and April was the first full month for China's work and production resumption-- but April also saw the global pandemic worsen, so a better-than-expected result will inject confidence into the world economy," Liao said. 

NBS official, Liu Aihua, said at a State Council press briefing on the economic data on Friday that the economy's performance in April continued improving in March. 

"But some of the improvements in April are  recovery that is fueled by pent-up demands. Still China's major economic indicators in the first fourth months contract, indicating that the economy as a whole has yet to bounce back to normal," Liu noted.

Given the threat of a resurgence of infections at home and fast-moving overseas outbreaks that are cratering the global economy, analysts stressed that headwinds are likely in the second quarter. 

There are many aspects of the Chinese economy that have not recovered to pre-virus levels. For example, full work and production resumption have yet to be achieved in some localities and sectors. 

As of April 25, about 85 percent of industrial companies above designated scales have returned to more than half of their production capacity, according to Liu. Major services firms and construction companies, the rate was over 70 percent and 60 percent, respectively.

Liu Xuezhi, a macroeconomics expert at the Bank of Communications, told the Global Times that it's highly likely that China's exports will slip again in May and June as the pandemic has impacted overseas demand, despite an 8.2-percent growth in exports in April.   

As demand weakens abroad, investment in the manufacturing industry will remain sluggish, dragging down overall investment throughout the second quarter, according to Liu Xuezhi.

"How China's economy navigates in the second quarter largely depends on the extent to which consumption and 'new investment' fuel growth," Liu noted.

During the press briefing, Liu Aihua stressed that China has confidence in future economic prospects. 

"We have a complete industrial system and basic infrastructure as well as a super-large market, which has not been hampered by the epidemic…China'seconomy is very resilient," Liu said. She also took note of the positive results achieved through the government's orchestrating the containing of the virus and restarting the economy.

In the first quarter, fixed-asset investment contracted by 16.1 percent year-on-year, while retail sales shrank by 19 percent. Both declines, however, narrowed from January-February data. Industrial output shrank 8.4 percent year-on-year in the first quarter.