By staff reporter Song Yanhua

(Caijing.com.cn) China’s economy is showing signs of stabilizing but it is still too early to determine whether the economy has bottomed out, a central bank official said at a conference on April 24.

Li De, vice commissioner at the People’s Bank of China’s research department, said at the China Chief Financial Officers’ Forum that economic indicators such as revived housing and auto markets suggest the country’s economy may be on the verge of recovery.

Real estate sales rose 23.1 percent year-on-year to 505.9 billion yuan in the first quarter, Caijing reported earlier, while March saw auto sales hit a record 1.1 million units. First-quarter retail sales volume also rose 15 percent year-on-year.

However, fluctuations in raw material prices and a decline in upstream product prices provide contrary indications. China’s corporate goods price index fell 6.6 percent in March from a year earlier, with oil prices rising only slightly month-on-month, and coal, steel and metals prices all down on February.

During the first quarter, China’s GDP grew 6.1 percent year-on-year and the CPI fell 0.6 percent year-on-year, with the falling wholesale price index indicating there may be further falls in the CPI yet to come.

Li said raising export tax rebates would do little to counter shrinking export demand, and suggested affected industries could benefit from a structural overhaul. China has already announced revitalization plans for its auto, steel, IT and textile industries. 

In March, China raised export tax rebates on items including textiles, iron and steel, after year-on-year exports declined for four straight months. The textile industry recently petitioned for a further rise in the rebate, from 15 to 17 percent.

While new lending by commercial banks hit a record 4.6 trillion yuan during the first quarter, Li is uncertain how much of the new loans went to stimulating the real economy, and did not rule out the validity of some claims that loans have been diverted to stock speculation.

Major banks recorded negative lending growth in the first 20 days of April, having scaled back loans on fears the China Banking Regulatory Commission may impose lending controls. However, the CBRC later gave the green light for banks to continue expanding loan growth, on the condition they apply vigilant risk management procedures.