A report in the Wall Street Journal is doing nothing to calm jitters about a Chinese market collapse. While an influx of capital form Beijing stabilized markets in July, and even sparked a rally, there seems to have been no lasting effect. Two key markets, lending and real estate, continue to show weakness. 

Like Us on Facebook

Chinese industrial output and fixed-set investment has also slowed. Today, the benchmark Shanghai Composite Index had a slip of 0.4 percent before a late-day rebound slowed the slide to just 0.1 percent.

However, red flags abound that China's famed bull economy is getting bearish. New credit fell to the lowest since measure since the 2008 global financial crisis. Both are acting as breaks against growth even as China addresses what is now openly called a speculation-driven property bubble.

"The July data is certainly a warning sign," said Chen Xingdong, chief China economist at BNP Paribas SA in Beijing, to Bloomberg News, "if the situation continues for another two or three months, there will be serious liquidity problems."

Market hysteria even over very slight falls can cause wild swings in the world's exchanges, and Chen urges caution for the short-term. 

"I wouldn't hit the panic button yet," said HSBC economist Frederic Neumann to Dow Jones Business News. "But this is a bit of a sober reminder of the challenges that China faces."

And investors and economic experts indicate that they expect a severe slow-down in the Chinese economy. In spite of the July rally, in the same month the International Monetary Fund urged China to slow expansion in 2015. IMF analysts warned China its economy stands before a "web of vulnerabilities" from rising debt and banks' exposure to toxic real estate.

Reports on new lending, property prices, and industrial production suggest Beijing must maintain its stimulus program for the remainder of fiscal 2014 in order to reach the target of 7.5 percent growth.