People visit a shopping mall at Tianjin's Hexi district on Saturday, as the district allocated 5 million yuan ($706,085) in vouchers to promote business recovery at a local consumption festival. The district plans to issue a total of 22.5 million yuan in vouchers to boost the economy. Photo: VCG

With improving economic activity, China's recovery of manufacturing and domestic demand accelerated in August, and retail sales probably grew year-on-year for the first time since the coronavirus outbreak, analysts say.

China is scheduled to release economic statistics for August on Tuesday, including the performance of major industrial enterprises, fixed-asset investment and retail sales. The latter figure will be keenly scrutinized, as some have said that sluggish domestic consumption means it will take some time for the world's second-largest economy to recover fully.

Retail sales fell 1.1 percent in July year-on-year.

Improving auto sales and the reopening of the entertainment industry shored up China's consumption, which is likely to have led to an increase in retail sales in August, Liu Xuezhi, a macroeconomics expert at the Bank of Communications, told the Global Times. 

According to the China Association of Automobile Manufacturers, auto sales in August grew 3.5 percent month-on-month and 11.6 percent year-on-year to nearly 2.19 million units. In particular, sales of new-energy vehicles increased 25.8 percent year-on-year.  

Thanks to the successful and fast containment of the coronavirus within China, domestic cinemas were allowed to reopen on July 20. Maoyan, a Chinese movie-ticketing platform, told the Global Times on Monday that more than 95.5 million moviegoers contributed to China's August box office, which hit 3.4 billion yuan ($500 million) - about 43 percent of the year-earlier level. 

So far, 9,740 cinemas in China have resumed operation, sending the resumption rate to 85.8 percent, Maoyan said. 

In addition, investment driven by the government's "new infrastructure" initiative is recovering in tandem with the speeding up of the manufacturing sector, according to Liu. 

China's official manufacturing Purchasing Manager's Index for August came in at 51, remaining in the expansion range, according to the National Bureau of Statistics. Analysts gave credit to the containment of the epidemic, which helped domestic industrial chain and supply chain to revive.  

Looking at foreign investment, favorable policies and the improved business climate gave confidence for foreign businessmen to invest in China. In August, the actual use of foreign capital by China grew 18.7 percent year-on-year, hitting a record high this year, the Ministry of Commerce said on Friday. 

"Given the momentum, China's GDP growth will top 2 percent this year, and economic growth in the fourth quarter of the year may accelerate to 6 percent," Liu said.

He added the two biggest uncertainties for China's economic recovery lie in external risks — the rise of protectionism and a resurgence of the coronavirus abroad.