Abstract: In the first half of 2016, under the role of active fiscal policy, loose monetary policy and new real estate policy, China's macroeconomy began to show signs of stabilization in the continuous bottoming, CPI returned to the "2 era", the negative growth of PPI narrowed sharply, the growth rate of corporate profits turned positive and the rebound of real estate data all indicate that China's macroeconomy does not have the possibility of a "hard landing". The first half of 2016 saw a number of noteworthy new phenomena: 1. "capacity reduction" is still in the layout stage, but the price of products in excess industries has begun to fluctuate sharply; 2. The "destocking" of third- and fourth-tier real estate has not yet begun, but the prices of first- and second-tier real estate have risen across the board; 3. The rectification of "zombie enterprises" and high-debt enterprises has not yet been substantially carried out, but a large number of highly indebted state-owned enterprises have entered the land market, overseas mergers and acquisitions market and financial investment market on a large scale; 4. Various measures of "deleveraging" have just begun to be deployed, but the macro debt ratio has continued to rise, and some indicators have greatly exceeded the warning line; 5. "Cost reduction" is in full swing, but various macro tax indicators continue to increase, and the overall profitability of enterprises continues to decline; 6. The growth rate of real estate investment rebounded beyond expectations, and various newly started projects rose sharply, but the growth rate of private investment fell sharply; 7. The growth rate of M2 remained stable, but the growth rate of M1 continued to rise, and the gap between M1 and M2 continued to expand; 8. The growth rate of household income continues to exceed the GDP growth rate, but labor productivity and corporate profitability continue to decline; 9. The growth rate of foreign investment has risen sharply, but the growth rate of exports has remained sluggish; 10. Various technical indicators have made rapid progress, and new economic growth momentum has begun to appear, but the overall labor production efficiency is still in the range of continuous decline; 11. Traditional industries such as industry have stabilized, but service and emerging industries have begun to show weakness; 12. The growth rate of policy-based investment has rebounded, but consumption has continued to decline. These 12 major phenomena fully illustrate that China's macroeconomic operation is still facing four major problems: first, the focus of supply-side structural reform has not been fully found; Second, the steady growth policy has not alleviated the deep-seated macroeconomic problems, but has caused various distortions to rise sharply, the efficiency of resource allocation has continued to deteriorate, and the confidence of economic entities has not improved; Third, the negative feedback mechanism of the economic downturn has begun to change, and the pressure of endogenous economic decline has intensified, and the market-oriented investment weakness and consumption weakness caused by "expected decline in production efficiency" + "expected decline in investment income" + "expected decline in income growth" have begun to spread deeply. Three new problems, namely the negative strengthening mechanism of short-term output and medium-term potential output, the "consumption-investment" dilemma brought about by the distribution of supranational income, and the further "dematerialization to virtuality" brought about by the decline in the relative returns of the real economy and the virtual economy have become the core obstacles for China's macroeconomy to get rid of the dilemma of continuous bottoming. Fourth, the current short-term macroeconomic stabilization is built on large-scale policy easing and bubble real estate recovery, and the differentiation between the real economy and the virtual economy determines that China's macroeconomy has not yet formed a foundation for sustained stability or recovery. In the second half of 2016, it was difficult for China's macroeconomy to continue to stabilize in the first half of the year. The reappearance of external economic fluctuations, the strengthening of internal distortions, the continuous accumulation and intermittent release of financial risks, and the comprehensive implementation of structural reforms have determined the further rise of China's macroeconomic downward pressure. At the same time, the diminishing efficiency of policy stimulus and the control of the real estate bubble determine that the hedging effect of economic policies will be greatly reduced. Therefore, the second bottom of this round of "asymmetric W-shaped adjustment" will appear in late 2016 and early 2017 and will be characterized by strong bottom fluctuations. According to the model, China's GDP growth rate in 2016 will be 6.6%, and CPI growth rate will be 2.3%. The report pointed out that 2016-2017 is a critical period for China's implementation of supply-side structural reform, and "major reform" + "more active fiscal policy" + "moderately loose monetary policy" + "strong supervision" must have operable grips and implementable plans, and various reform programs and policy measures must make new adjustments.（AI翻译）