Coronavirus infections in China have markedly declined in recent weeks, but the Asian giant's economic recovery may be held back by the global outbreak, as countries around the world struggle to contain the rapidly spreading disease. China has seen a drastic drop in infections — from hundreds of cases per day in February, to less than 50 each day this week.

The rate of resumption of work at its factories and provinces has also inched up, according to analysts tracking the progress of activities in the country. China had shut down most provinces in a bid to contain the outbreak, and roads, transportation networks as well as factories had been closed. However, Steve Cochrane, chief Asia Pacific economist at Moody's Analytics, told CNBC that the pace of recovery in China might not be as fast as hoped for — even if infections are slowing. "It seems that we're beginning to be on the back side of this now here in Asia, given that the number of infections is down. In China, the infections still remain fairly isolated in Hubei province, that's a very good thing," he said, referring to the epicenter of the outbreak in the country. "But I don't see the recovery in China really coming on any more faster than we might have expected."

The virus outbreak has now spread to China's key trading partners, including South Korea, Japan, Europe, and increasingly the U.S. ANZ Research

He explained that's due to softening demand from the rest of the world, where cases are surging. Italy, Iran and South Korea have reported more than 7,000 cases each, while France, Spain and Germany each reported more than 1,200 cases, according toe the World Health Organization's latest figures. In Europe, Italy — which has the highest number of cases outside China — has shut down the entire country. In the U.S., cases crossed 1,000 this week, and the virus is present in at least 35 states. "Just as China may be able to get production up close to where it was last year, global demand is going to weaken, clearly from the U.S. and Europe. Europe is on the cusp of recession. The U.S. economy is strong but very vulnerable to the coronavirus," Cochrane said.