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.