The latest report by research firm China Beige Book found "an unmistakable first-quarter recovery“ driven by increased credit, running counter to Beijing's efforts to reduce reliance on debt, or the process of deleveraging.

Revenue and profits, investment and hiring improved nationwide, as compared with both the previous quarter and year-ago period, the report said.

The survey also found that reports of corporate borrowing reached the highest point since the middle of 2013. More worryingly, the survey said the proportion of loans made through the murky world of shadow banking increased for a second-straight quarter to the highest level since the second quarter of 2016, another period marked by stimulus.

However, the cost of that borrowing increased. Every single sector and region of China saw credit costs rise in the first quarter compared with the prior quarter, the report said. The average bank loan rate was up 101 basis points to 6.9%, and the average non-bank rate up 426 basis points to 11.42%.