CNBC reports that according to S&P Global Ratings’ Asia-Pacific chief economist, China’s services sector has been slow to rebound from the Covid-19 pandemic — and that’s one aspect of its economic recovery that’s been downplayed.

China was the only major economy that grew last year despite challenges posed by the Covid-19 pandemic. It reported a growth of 2.3% in 2020, but the performance across sectors was uneven with exports staying resilient while consumption has continued to lag.

“This is one of the most understated aspect of China’s recovery, the fact that it is so unbalanced. China’s Covid strategy has been successful from a health perspective, but it is imposing a long-run economic cost in the sense that ... we’re seeing the services sector come back much more slowly than people thought. That’s depressing jobs and that in turn is depressing consumer confidence,” Shaun Roache told CNBC.

Roache pointed out that Chinese retail sales have not recovered to levels seen before the pandemic. For most of 2019, China reported monthly retail sales growth of above 8% year-on-year. But sales have been contracting every month since March last year, as Covid-19 forced large swathes of the economy to shut down.