Chinese property prices pick up

The Chinese government is offering incentives to homebuyers

Chinese property prices rose in June for the first time in seven months, official data shows.

The National Development and Reform Commission said that house prices in 70 cities rose 0.2% in June from a year earlier. Prices rose 0.8% from May.

A pick-up in the real estate sector is viewed as a sign China could be emerging from its slump, as a 4tn yuan ($585bn) stimulus plan takes effect.

But overseas demand for Chinese-made products remains weak.

China's exports fell again in June for the eighth consecutive month, but the declines were much less severe than in May.

Exports fell 21.4% in June from a year earlier, a moderation from May's record 26.4% decline.

Imports were down 13.2%, much better than the 20% forecast and followed a 25.2% in May.

"The slower fall in exports is due to a slight pick-up in US consumption, but I wouldn't call it confirmation of a recovery trend," said Jiang Chao, analyst at Guotai Junan Securities in Shanghai.

"Imports fell much more slowly, which means domestic consumption is getting better and industrial activity is rising," Mr Jiang added.

Credit fears

There have been signs that the Chinese economy could be recovering, as China's massive stimulus programme helps spur domestic demand.

Bank lending in June was more than double the level seen in May, while retail sales, investment and factory activity have also picked up.

Property prices have risen as the Chinese government has offered incentives for home buyers, such as cheaper mortgages and lower down payments.

But some economists fear that the economy might be being artificially inflated by cheap credit.