It is premature to say that inflation has returned to China, but bank deposit rates need to remain positive in real terms, an economic planning official said on Tuesday.

Zhou Wangjun, a deputy director in the price department of the National Development Reform Commission (NDRC), said May's 3.4 percent year-on-year rise in the consumer price index (CPI) was "not too high". But he said interest rate increases were needed when consumer price inflation was outstripping deposit rates.

China's one-year deposit rate is 3.06 percent.

"Will food prices increase lead to inflation? I think it is still too early to draw that conclusion," Wang said on a live Web cast on the Chinese government portal www.gov.cn.