"Shrinking incomes may become the next warning of an accelerating slowdown, which can influence the whole economy in a new cycle."

Growth downside risks in the world's second-largest economy are accumulating, along with the weak global environment.

Global economic growth began a new round of decline in late 2012, according to Liu.

The World Bank downgraded its forecast for global economic growth to 2.2 percent from 2.4 percent in June. Global GDP increased by 2.3 percent in 2012.

Liu said that weak overseas demand has depressed manufacturing output and further curbed investment in the industrial sector.

Excess capacity in resources, minerals and other manufacturing industries is broad in emerging economies, which may push the world economy into a new recession.

"Compared with the financial adjustment, reducing excess industrial capacity problem may need more time," Liu said.

In addition, the European economic recovery was weaker than expected, Liu said, which may continue to exert pressure on China's exports in the third quarter.

He expressed concern that the downside momentum in China may be intensified in the coming months, given negative signals in terms of the economic cycle and structural imbalances.

"It may get close to the growth bottom line that the government can tolerate in the third quarter, which may force the leadership to slightly adjust the current policy."

Nation's economy possibly faces more decline

Cai Hongbin dean of the Guanghua School of Management at Peking University

Given the economic slowdown in the second quarter of this year, Cai Hongbin, dean of the Guanghua School of Management at Peking University, says he is not optimistic about a pickup in the Chinese economy and warns about a possible further decline.

His opinion is based on the current overall economic slowdown as well as increased risk in substantial sectors of the economy.