According to statistics released by the State Statistics Bureau, Chinese economy has resumed its downward trend in the third quarter after a second quarter rebound. The falling real estate industry contributes mainly to this round of unavoidable economic downturn. Since a downward economy will be a new normal in China, Chinese government should be well prepared to tackle various risks engendered by it, while accepting a much lower economic growth rate. The government should take reform as its first priority, especially a deeper reform on its fiscal and taxation system which is vital and should be endowed more attention.