Economists cautious about China's recovery

Investment in the country's property sector increased 20.5 percent year on year in July, accelerating from 20.3 percent in the first half.

However, July's data assured economists that the 7.5 percent economic expansion target set by the government for the full year of 2013 is attainable.

Li Xunlei, chief economist at Haitong Securities, projected the economy's growth at 7.4 percent in the third quarter and the whole year's at 7.5 percent.

"We had expected that the slowdown would be more serious coming into the second half, but right now we think it looks increasingly likely that the economy will achieve its expansion target," said Lian. He forecast a 7.4-percent growth for the remaining two quarters.

Given the positive changes in July, analysts believe the government will continue to keep its macro-control policies stable. "The need to back growth while controlling risks in the property sector, local government debts and shadow banks requires government polices to stay steady," according to E Yongjian, a financial analyst with the Bank of Communications.

Authorities have been trying to strike a balance between stabilizing growth and pushing ahead with reforms. They pledged at a recent meeting that they would continue to coordinate the tasks of "stabilizing growth, restructuring the economy and promoting reforms."

The new government has so far demonstrated greater tolerance for slower growth in its efforts to switch the country's growth pattern from dependence on exports and credit expansion toward one driven by consumption and innovation.

Liu Shijin, deputy head of the Development Research Center of the State Council, said in an interview that the economy is in a crucial period of shifting from super-high rates to "moderate growth."

"The economy's expansion will ease to between 7 and 8 percent from 2013 to 2014, then stabilize at about 7 percent or lower after two or three years," Liu forecast.