China's economy is showing signs of stabilizing and is at a critical phase of recovery; and it was necessary to carry on with the proactive fiscal and moderately loose monetary policies, the State Council said yesterday.

"There are increasing favorable and positive factors in the economy," according to the consensus opinion at an executive meeting of the State Council presided by Premier Wen Jiabao yesterday.

"Still, the foundation for the economy's recovery is not solid enough and there are many uncertainties," according to the conclusions of the policymakers.