China Economic Analysis Report, No 48, March 2013

During the changing stages of economic growth, the macro-economy has fluctuated wildly with unstable expectations. Market expectations varied greatly like a roller coaster. It turned into widespread pessimism in March from overall optimism in Feb.

On the surface, it was triggered by data changes. In essence, it was because of the lack of a new driving force for sustained growth. Expectations were unduly affected by short-term data. The international economic situation remains; the financial markets are basically stable. A better overall situation than last year will remain.

As for domestic demand, since investment stability was subjected to real estate fluctuation and local debt pressure, consumption stability dropped due to a decline in income growth and policy adjustment. Though the domestic market has more uncertainties than foreign markets, the downward pressure to economy was not big.