Zhang Yu

JeniZhang13@163.com

CHINA’S economic recovery since the beginning of the year has been uneven, said Swiss banking giant UBS on Tuesday.

“The consumption recovery is obvious after the COVID-19 pandemic, particularly in the catering and service sectors. But consumer spending on goods like household appliances is relatively weak,” Wang Tao, head of Asian economic research and chief China economist at UBS, said in Shenzhen.

Wang said that the gradual improvement in the labor market and an increase in household income are key factors to drive the consumption recovery.

Some excess savings over the last three years are expected to be gradually used to further spur consumption, she said.

“But the amount of the additional savings we calculated is not large. The release of these savings will be extremely gradual since, in our opinion, residents’ confidence in the future is still insufficient despite the relatively slow economic recovery,” Wang said.

Wang said that global demand for electronic items is still sluggish, weakened largely by the flagging world economy.

However, China’s auto sales and exports are robust, contributing a lot to the country’s economic growth.

Wang said that it’s crucial to restore confidence of the corporate sector through increasing orders, stabilizing cash flow and boosting profit growth.

Measures such as tax breaks or interest rate cuts are not enough and will have a relatively limited impact on boosting confidence, she said.