As you can see from the chart, private investment (Non State-Owned Enterprises) growth accelerated to 37 percent on a year-over-year basis, a more rapid rate than that of state-owned enterprises. This is the first time we've seen this happen since October of last year and it is the fastest rate of growth since November 2007.

A more confident private sector should not only make China's ongoing recovery more sustainable in a time of diminishing government-mandated stimulus, but also facilitate the structural transition of the Chinese economy toward private consumption.

The private investment revival is largely driven by the real estate sector, which has seen inventory levels drop in major cities like Beijing and Shanghai. CLSA's on the ground survey revealed that 50 percent of middle-class families surveyed said they were considering buying an apartment.

Activity has also picked up in the business sector. Out of more than 100 small- to medium-sized enterprises surveyed, 32 percent added staff during this past quarter and more than that expected to do so this quarter. Even more telling is that more than two-thirds of the small- to medium-sized enterprises expect the business environment to improve over the next six months.

It's still too early to call but this could mark a shift in China in which the government's economic assistance is reduced and economic growth is sustained by the private sector.