That is a tough question as I'm not sure myself. I hope it wasn't real but that sequence is very convincing. I think a lot of that argument comes from the way the cat just lies amongst the rats, near the end of the scene, looking up towards the camera. Wouldn't the cat put up a least some sort of a fight?
There was an interview somewhere where Mou Tun Fei explained that he loved animals but the scene had some sort of a meaning to it and it was down to your own interpretation. Which I can't figure out if it's a yes that scene was real or not.
The rats being burned alive afterwards however was very much real.