China Economic Analysis Report, July 2013

As investment, exports, manufacturing, and finance markets send positive signals, the coincident macro-economic index in August keeps getting better and market confidence is rising. GDP growth in the third quarter is expected to hit 7.8 percent in line with the current coincident index, but continuity in the economic turnaround is still facing a test.

Since leading indicators are falling again, and the leading cyclic index seems to have peaked in July, the index will face downward pressures in one or two quarters. The cyclic index reaching its peak also shows that the economy is in a downward trend in a medium and long term, which also verifies that the potential growth rate, will go down further.