Since Q4 last year, there has been caution about the macro economy in China. "Risk prevention" is the keynote for this year, and we will continue to uphold this principle.

There is optimism in macroeconomic research, but pessimism has taken control.

In predicting the performance of the Chinese economy in the second quarter, we would like to remind you of some of the positive signs in China's economy, not in the rising figures, but in the improvements in quality, efficiency and structure. Despite the better performance in Q2, liquidity may decrease slightly.

1. It is normal to have a decline in investment growth

There is an intensifying downward pressure on investment demand, following the downward cycle of the property market and the removal of excess capacity. This is the market's self-cleansing and self-regulation.

In the short term, investment will still be the main engine for growth. When investment falls, the economy slows down. During the first two months of this year, fixed-asset investment increased by 17.9 percent, down by 1.7 percentage points from last year. It is the slowest growth since December 2001.

The real estate market once again fell into gloom. From January to February, nationwide revenues from housing sales dropped 3.7 percent year on year. Bearish housing sales noticeably dragged down the investment in the property market and in the manufacturing sector. In a bid to ensure stable growth in investment, one has to rely on investment in infrastructure.

The CPC central authorities' austerity measures and anti-corruption campaign did prevent local governments from launching excessive infrastructure projects, though such measures may not necessarily improve investment efficiency.