An analyst predicts that China's economy is undergoing a gradual and agonizing transformation.

• After China released dismal economic data over the weekend, economists have scaled back their predictions for the country's full-year GDP growth.
• Cornell University professor Eswar Prasad has warned that Beijing's economic outlook for the second half of the year is "flashing red, or pretty close to red."

Analysts have revised their predictions for China's full year GDP growth after a series of data releases over the weekend indicated a pessimistic outlook for the economy.

Eswar Prasad, professor of international trade and economics at Cornell University, stated on CNBC's "Street Signs Asia" on Monday that the latest round of data has not brought much good news, and this has been the pattern for the past few months.

Prasad stated that both long-term and short-term issues related to property prices and domestic demand, particularly private investment and household consumption, have not been performing well.

Beijing's economic outlook for the second half of the year is now "flashing red" or "very close to red," as he cautioned.

According to Duncan Wrigley, chief strategist at Everbright Securities International, on CNBC's "Squawk Box Europe," despite the significant housing downturn in China, it has not experienced a systemic financial crisis, unlike many other subprime crises, such as Japan's big housing downturn.

The Chinese government has successfully shielded the housing market adjustment from the financial sector, preventing a larger crisis. However, this has resulted in a slow, painful, and gradual adjustment process.

The data released on Saturday revealed that China's retail sales, industrial production, and urban investment in August did not meet the anticipated growth rates, falling short of the expectations of economists surveyed by Reuters. Additionally, the urban jobless rate increased to a six-month high, while year-on-year home prices experienced their sharpest decline in nine years.

The latest figures represent another disappointment for the world's second-largest economy, which has struggled to recover from the Covid-19 pandemic.

Prasad criticized the Chinese government for not taking bold measures to stimulate the economy, stating that monetary policy requires significant action and early implementation, neither of which have been observed.

The People's Bank of China is not expected to cut rates as much as the U.S. Federal Reserve later this week, according to Helen Qiao, chief Greater China economist and head of Asia economics at the Bank of America.

Qiao stated that the slowdown of economic growth necessitates further easing, and he emphasized that job security and income growth are crucial factors that influence consumer spending, which are currently lacking in China.

The government's target of 5% for China's 2024 GDP growth has been surpassed by Bank of America's revised forecast of 4.8%, while Citigroup has projected a growth rate of 4.7% following the weekend's data release.

The Chinese economy is facing challenges, with the production side weakening, according to Cornell's Prasad.