New viral outbreaks are threatening the recovery. The service sector is still in trouble, with high unemployment prospects. China pledges funding for new infrastructures in ASEAN countries. But it has not yet fulfilled its commitments to the Philippines.

Beijing (AsiaNews) – China's post-COVID-19 economic recovery continues to slow down.

The June Caixin/Markit services purchasing managers’ index (PMI), released today, dropped to 50.3 points from the 55.1 in May.

Although anything above 50 indicates expansion, last month’s level is the lowest since April 2020, when the country was grappling with the first stage of the coronavirus emergency.

The sub-index for business activities in the services sector dropped in June to 52.3, two percentage points lower than in May.

Analysts blame the difficulties of China’s service sector on new COVID-19 outbreaks in Guangdong province, which generates 10 per cent of the country’s GDP.

New cases reported in Ruili (Yunnan) have raised fears that the pandemic might take off again.

The city is close to the border with Myanmar, where the ongoing confrontation between the military and armed opposition groups has made it more difficult to contain the epidemic.

With the slowdown, Chinese authorities expect a decline in employment in services in the coming months, a sector that usually attracts younger workers.

According to the National Bureau of Statistics, the services employment subindex fell to 47.6 points in June, down by 0.6 over the previous month.

China’s quick post- pandemic economic recovery was seen as a possible driver of global recovery.

Now the declining figures risk putting pressure on Chinese leaders, who undertook to finance new infrastructures among the members of the Association of Southeast Asian Countries (ASEAN) in order to counter renewed US activism in Asia.

Last month, China announced plans for a solar power plant in Malaysia and a 580-km highway in Laos. It also promised to help Cambodia improve its transit networks, and has invested in 61 projects in Vietnam from January through April.

All this is worth billions of dollars. And China has been unable to keep the commitments it made in the recent past.

As official Philippine figures show, China only delivered a fraction of the aid and investment promised to the Philippines in 2016.

With the signing of the relevant agreement, the then newly-elected President Rodrigo Duterte announced the Philippines’ “separation” from its US ally.

Of the US$ 9 billion in soft loans China agreed to, only 590 million have been provided, and at higher-than-average interest rate.

Chinese direct investment in the Philippines between 2016 and 2020 totalled US$ 3.2 billion out of US$ 15 billion pledged.

By contrast, Japan's development aid to the Philippines reached US$ 8.5 in 2019.