China's economy is looking brighter but it's not in the clear yet

The positive developments come after the world's second-largest economy was battered by widespread Covid lockdowns, a sweeping crackdown on tech companies, and a real estate slump.

From big gains in tech stocks to robust trade data, China has had plenty of good news on the economic front this week.

Consumer spending and factory output both shrank sharply in April, while unemployment has surged to the highest level since the initial coronavirus outbreak in early 2020.

As China takes steps to gradually reopen businesses, and authorities introduce a slew of measures to stimulate activity, there are signs that a revival may be around the corner.

Still, analysts say more needs to be done to repair investor confidence in China, and some big risks haven't gone away.

"It will take time to repair the business confidence, and sell-offs in Chinese assets might resume if China data proved to be disappointing again," said Ken Cheung, chief Asian foreign exchange strategist for Mizuho Bank.

President Xi Jinping's clampdown on private enterprises, a campaign to contain excessive borrowing by real estate developers, and a relentless adherence to zero-Covid policy.

China also released strong trade data for the month of May, after a slump in April. The country's exports jumped 16.9% in May from a year ago, compared with only 3.9% growth in April.