Another realty boom not needed

These have been a few disappointing months for anyone watching China's economy. The general view at the start of the year was that economic growth was on the point of bottoming out. Instead, the economy continued to slow down in the second quarter. There was still no sign of a rebound in growth in the data for July.

In the meantime, the government has cut interest rates, relaxed constraints on bank lending and approved a host of new infrastructure projects to turn the economy around. But the government has continued to insist that its controls on the property market will remain in place.

Real estate investment remains in the doldrums as a result. In July, developers launched 25 percent fewer projects year-on-year. The contrast with the situation three years ago is stark. A rebound in real estate investment of the scale we saw then would be enough to lift China's growth over the next year by 2 percentage points. If everything else remained the same, this alone would be enough to push GDP growth back above 9 percent.