This paper uses the threshold autoregressive model to describe the China’s business cycle from the first quarter of 1990 to fourth quarter of 2006. We find that China’s business cycle changes from low growth to suitable growth and fast growth, and at last return to low growth. The threshold values of these three kinds of growth are 8.20% and 9.71%. With the nonlinear forecasting technique, the point forecast suggests that the growth rate will fall persistently in the future 8 quarters, and the interval forecast shows that it will run in area from 7% to 13%.

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