It can’t stop a slowdown. Construction is the main instrument of cyclical management. No other sector is big enough to compensate, nor capable of passing on the credit momentum.

The immediate danger is what happens to Chinese developers with $ 5.1 trillion (£ 3.7 trillion) in debt between them, much relying on the sale of unbuilt property to replace existing debt.

Hedge fund veteran George Soros this week raised the possibility of a systemic financial crash and educational calculation for Western tourism investors. But I find it hard to imagine a collapse of Lehmanesque “Minsky” in a system where the state retains iron control over the banks.

Authorities are already orchestrating a soft landing in disguise for indebted developer Evergrande. “They can’t afford to let him go bankrupt, so they kick the box,” said George Magnus of the China Center at Oxford University.

“The Party aspires above all to two things: control and stability. If the real estate market falters, the consequences for the Chinese economy will be brutal. They won’t want to take this risk until next year’s Party Congress, ”he said. The forum is meant to be the ultimate crowning achievement for “helmsman” Xi.

Still, that doesn’t prevent a slow motion tumble which puts an end to the illusions of Chinese economic exceptionalism and which is important enough to challenge the post-pandemic global recovery. The unfolding drama overshadows the relatively trivial question of when and by how much the Fed will change its bond purchases.

The Covid boom has been perversely lucrative for owners of capital in wealthy economies. But the easy money is running out and the political risk is increasing. We are moving through dangerous global waters.


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