The International Monetary Fund says China is showing modest improvement in economic activity, despite weak external demand.

The IMF released a report on the economic impact of the coronavirus pandemic on Monday.

It says China is seeing a modest improvement in one of its economic indicators after a sharp decline early this year.

It said the improvement is "reflected in daily satellite data on nitrogen dioxide concentrations in the local atmosphere -- a proxy for industrial and transport activity."

It says the recovery suggests that "containment measures can succeed in controlling the epidemic and pave the way for a resumption of economic activity."

The perceived recovery may be a result of Chinese President Xi Jinping's efforts to urge companies to resume their businesses.

But the IMF adds that, "there is huge uncertainty about the future path of the pandemic and a resurgence of its spread in China and other countries cannot be ruled out."