By Hong Soon-do, Beijing correspondent, AsiaToday - It seems certain that China's economy is in a crisis. All the recent indicators show the sign of weakness for the world's second-biggest economy. If China does nothing about it, it's unlikely China can achieve the growth target of 7% this year.

Chinese cars waiting shipment at a port in Shanghai. The number of vehicles dropped sharply these days, reflecting a drop in export./ Source from search engine Baidu

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According to the Sept. 9 reports of China's state-run media outlets including Economic Daily, China's imports and exports shrank, adding concerns that the world's second-largest economy may be slowing more sharply than earlier expected. China's exports dropped 5.5% year-on-year to $196.8 billion in August. Imports fell far more than expected with a decline of 13.8% from a year earlier to $136.6 billion falling for the 10th straight month.

Take note of its default risk being higher than many European countries such as Italy and Spain that are experiencing a financial crisis. The credit default swap (CDS) premium on China reportedly stood at 120.8 basis points as of September 7, higher than Spain and Italy with 101.5 and 116.0. The higher the premium, the higher the perceived risk of the corresponding country going bankrupt. Given that China's CDS premium was much better than those two countries not so long ago, it's pretty certain that things aren't looking good for China.

Amid the growing concerns, China's banks saw a sharp reduction in growth of profit in the first half of the year. The Industrial & Commercial Bank of China, the nation's largest lender, announced that its profit rose by 0.7% to 149.4 billion yuan, compared with 7% growth for the same period in 2014. Agricultural Bank rose only 0.3%, down from 13% growth last year. In addition, the Bank of Communication reported growth of 1.5% in the first half year.

China's stock market, needless to say, is in a serious situation. The Shanghai index has now crashed by roughly 40% from its mid-June peak, losing a whopping 30 trillion yuan. Recovery seems impossible for a while unless something special happens.

Chinese authorities are to announce the consumer price index (CPI) and producer price index (PPI) on Thursday. Retail sales and industrial production indicators are scheduled to be revealed on September 13. At the moment, the outlook is not so optimistic. For now, China's economy has no choice but to face challenges.