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Recovery signs but Beijing stays cautious

There are growing signs the Chinese economy has begun to recover in response to a government stimulus package largely funded by the state-run banking system. On Thursday, the government is expected to announce gross domestic product growth in the first quarter of 6-7 per cent.

Some important voices, however, have said it is too early to claim victory in Beijing's struggle against falling economic growth.

Indications of a rebound – in bank lending, industrial output and better-than-expected trade figures – were hailed at the weekend by premier Wen Jiabao. But he warned China's economy faced “very big difficulties”.

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