Nobel laureate Robert Shiller, who is best known for accurately predicting the collapse of the property market in the Untied States, which triggered the financial crisis of 2008, has warned that the Chinese property market is facing a similar calamity.

His prognosis has stirred a hot debate in the media and on the Internet. But while conceding that property prices have continued to rise, especially in major cities, to levels fewer and fewer people can afford, many economists in government think tanks and academia were eager to sooth market nerves by noting the fundamental differences between the Chinese economy and that of the US.

In China, these unwavering optimists contended, brutal market forces that made an adjustment so painful in the US and some other economies, can be tempered by administrative as well as monetary measures. Indeed, the market is expecting the government to introduce stronger measures to deflate the property bubble in the coming months. Many analysts believe a nationwide adjustment will only be brought about by a substantial hike in borrowing costs.

However, there are those who warn that the property sector is like the genie that has grown too big and wild to be put back into the bottle. What the authorities can, or should, do, they said, is to contain the potential damage of the fallout of what is widely believed to be an inevitable adjustment, or crash, if you must.

It's hard to assess the potential scope of the fallout because so many local governments have become highly dependent on the income from land sales to finance their humongous debts from banks. As a result, a sharp downturn in real estate prices across the country could set off a chain reaction that could shake the foundation of the financial markets.