The problem is that all three are right.

Europe still faces a debt problem and a banking crisis.

The United States is creating about half as many jobs as it needs, just to keep pace with demographic growth. The federal government is laying off those temporary census workers and state and local governments are in a big job squeeze.

And China is indeed in a property bubble. When it bursts, the Chinese locomotive that has been hauling Asia and some of the world out of recession is going to stall. That's why it is the real pessimists who worry about China, because if China falters then the global economy's one strong driver of growth will fade away. Absent China, it isn't easy to see where growth will come from.

Europe looks flat, apart from Germany's export boom, with a total of $500 billion in public spending cuts already pledged by its various governments. And if China slows then Germany's exports are going to decline. Japan is locked in a slow growth pattern and both Europe and Japan are aging fast, with more and more costly pensioners and fewer younger people of working age.

The markets already seem to be pricing in a long period of slow growth in the United States where the one bright spot is the high level of corporate profits. But those profits are not coming from healthy sales, rather they stem from cost cuts, particularly with the shedding of labor. American factories are running at just more than 70 percent capacity so there is limited need for new investment in plant and technology. The catch here is that if American companies aren't employing people, then there will be less consumer spending.

So if Europe, Japan and the United States aren't going to be the sources of new growth, that puts all the more focus on China. This is where the worry over China's property market becomes acute. One way to spot a dangerous bubble in real estate is to calculate the proportion of a country's total real estate valuation against its gross domestic product.

At the end of 2006, when the U.S. housing bubble peaked, its real estate valuation had risen to just less than double the value of its GDP. Then the bubble burst, starting with the sub-prime mortgage sector and the consequences of that collapse are still with us. In 1989, when the Japanese property bubble burst, real estate valuations were much higher, peaking at a staggering 3.5 times the value of Japan's GDP.

In China today, total real estate valuations are 3.3 times GDP. Property specialists at Knight Frank LLP say, residential property prices jumped by a scorching 68 percent in the first quarter of this year.

This is worrying enough, which is why the Beijing government has been trying to cool the over-heated market by ordering bank loans to be scaled back. The latest signal from Beijing is really startling. China's Banking Regulatory Commission publicly warned the country's banks late last month to "deepen" their stress tests on how the banks would with a property crash.

It has emerged that Liu Mingkang, chairman of the commission, told the banks to stress test their resilience in the face of a 60 percent drop in property prices. Moreover, he asked them to factor in the prospect of bad loans coming in the industrial sectors that have done well from the construction boom, like steel and cement, furnishings and kitchen and bathroom fittings.

That is doubtless a worst-case scenario. Previous stress tests has assumed a 30 percent fall in the property market.

That's why China's official Xinhua news agency last month published an editorial that warned, "The possibility of social instability is becoming real as the housing and related land issues worsen by the day."

The threat of a property bust as the more serious because China is about to hit its demographic problem. The number of young people entering the labor market peaked two years ago and is now heading slowly but steadily downhill, as the number of Chinese pensioners is starting to rise.

Forty years ago, China had 12 percent of its population under the age of 5 and only 6 percent over the age of 60. Ten years ago, the numbers of the two groups were level. Today, 15 percent of the population is older than 60 and 7 percent are under the age of 5. Look forward another 30 years and there will be 6 elderly people for every child under the age of 5.

If China's property bubble bursts, it will hurt for a year or two but the economy will recover. It may, however, never be the same again because there is no endless supply of new workers coming on stream to keep wages down and prices down. The days of double-digit growth are ending. And a China growing at 5, rather than 12, percent a year isn't going to force-feed the global economy. That's why the real pessimists worry about China.

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