A two-track approach is emerging in Beijing: sticking to President Xi Jinping's stance on strictly controlling Covid pandemic while his No. 2, Premier Li Keqiang, is being given the task of boosting the economy, the Wall Street Journal reported.

However, Xi's zero- Covid policy is complicating Li's economic-revival mission, the report said.

This came as Chinese travel and spending have slowly started to improve as the country lifts some of its strictest coronavirus curbs, though the government's commitment to Covid Zero has made a strong recovery elusive.

Spending data from the three-day holiday weekend to celebrate the Dragon Boat Festival showed a slump in domestic tourism revenue of 12.2 percent from a year ago - a much narrower drop than the 43 percent plunge recorded a month ago over the national Labor Day holiday. The 10.7 percent decline in trips over the period was also smaller than a 30.2 percent decrease reported over the May holiday, data from the Ministry of Culture and Tourism showed.

Meanwhile, China's services activity contracted for a third straight month in May.

The Caixin services purchasing managers' index rose to 41.4 in May from 36.2 in April, edging up slightly as authorities began to roll back some of the strict restrictions that have paralyzed the financial city of Shanghai and roiled global supply chains. However, the reading remained well below the 50-point mark that separates growth from contraction on a monthly basis.

Separately, Hong Kong's private sector expanded in May at the fastest pace in more than a decade as the city continues to recover from its deep, Covid-fueled economic slump. The S&P Global PMI rose to 54.9 in May, up from 51.7 in April and the sharpest rate of growth since March 2011.

China services contracted for a third month. Reuters

China takes two-track approach to revival