Abstract: This paper calculates climate indexes by both the traditional method of NBER and dynamic factor model (DFMs), and obtains the information of the turning points from the indexes respectively based on Bry-Boschan Method (B－B), which is taken as a reference of business cycle fluctuation. The two climate indexes and relevant information of the turning points are close, they reflect the trend of Chinese business cycle fluctuation. Comparing the peaks and troughs which are different, this paper finds that SW climate index is more precise, so the turning points of the SW index are identified as the reference dates of Chinese business cycles. Based on the index, there exist four business cycles since 2000. We find that the first two business cycles have the asymmetry character of long expansion stage and short contraction stage, while the recent two business cycles have an opposite asymmetry character and China's economy is still in a contraction stage now. This paper also investigates whether Markov Switching (MS) model can be used to identify China's cyclical turning points. Unfortunately, this paper concludes that MS approach is not a good choice to decide China's cyclical turning points．

Key Words:Business Cycle;Climate Index;Turning Points;Dynamic Factor Model