| Abstract | This paper, based on “The Three Period Superimposed” and the cointegration among the GDP, consumption, investment and net export in China, decomposes Chinese GDP into long-term trend and cycle components. According to the evolution of long-term trend and truncated normal distribution, this paper makes inference on the quantitative characteristics of Chinese economy's “new normal”. The main results are the following. The structure of long-term trend of Chinese GDP is shifting down. Its average growth rate reduced from 9.88% in 2001-2009 to 7.85% in 2010-2014. This result not only provides the theoretical and empirical evidence for supply-side reform, but also shows the necessity of China's economic slowdown. Specifically from 2010 to 2014, the annual growth rate of the trend declined from 9.44% to 7.6%, which implies that the weak supply scenario is formed since 2010. Especially, since 2013, weak supply scenario had to be combined with weak demand. This paper concludes that under “new normal”, the annual growth rate of GDP is within the range 6%-7.5% with the biggest probability 91.5%, which implies that the growth rate of GDP is declining from 10% to 6%-7.5%. |