In the shadow of the global business cycle, the Chinese economy will face severe headwinds in 2016. Meanwhile, a lot of new industries and new growth engines have been fostered in the Chinese economy, making it a mixture of stagnancy and growth. The basis of the next round of rapid growth is being built during this process of adjustment. In the face of two main kinds of economic risks in 2016, high attention must be paid to the following issues: the reshaping of the incentive system; the recovery of the real estate market; the evolvement of the world economy; and the re-orientation of the macro economic policy. The bottom of the Chinese economy is expected to appear in the second half in 2016, and steadily rebound in late 2017 when it will return to a rapid growth track. (Series: China Advanced Research and Analysis Series) Subject: Chinese Studies, Asian Studies, Economics, Global Trade]