HERE IS THE FACT. Property in gross domestic product is defined as building and construction activity plus costs of ownership transfer. At present this accounts for 10 per cent of GDP, the lowest figure in at least 30 years.

Central role in the economy, was it? Where does one even begin to pick out the holes in the rambling investment thoughts of Andy Xie when he indulges in his usual line of Hong Kong Bad, China Good?

He was at it again this week with a new Morgan Stanley report, Dead Cat Bounce Dying, and, as he himself does not change his spots, with his old message - Hong Kong kaput, property all froth. We did not get much of the China Good part this time, except by implication, but there was not much anyway to support the sweeping assertions that characterise his work.

High among them was the one that must disqualify me as a commentator: 'Hong Kong has an infrastructure for producing property bubbles. The media, especially the printed media, depends (sic) on the property sector for revenue.'

There you go. My bonus hangs on following explicit instructions from the boss to talk up the property market so that the South China Morning Post will get more property ads and thus bigger profits. Aw shucks, he's on to my game at last.

As evidence of a property bubble, he also says that Hong Kong has the highest number of property analysts per capita in the world. Pssst, don't tell anyone but here is a surefire way to make money. Sell all Las Vegas gaming stocks. Las Vegas has the highest number of gaming analysts per capita in the world.

It appears, however, that Andy did not bother to avail himself of the advice of this abundance of property analysts. These people work with hard data, which does not seem to be his forte, and all he could manage was one simple chart comparing wages and home prices on an index basis of 1982. Why 1982 I cannot tell you except that perhaps it was convenient to his argument, but I am still puzzled as to what that chart demonstrates.

In the end, his predictable pessimism comes down this time to the view that Hong Kong property has nowhere to go but down because there is little growth in population or wages, there is wage pressure from across the border (China Good) and interest rates are likely to rise by 100 basis points soon.

I must look up this close correlation between population growth and property prices some day. Strange to say, in the 18 years I spent in the investment business I never heard any property analyst mention it and four of those years were at Morgan Stanley with its well-known property analyst, Peter Churchouse, just across the desk divider.

Andy might do well, however, to take note that the four boroughs of New York, Morgan Stanley's home base, have a lower population now than in 1970 and yet home prices have risen more than fivefold in New York since the mid 1970s.

He may also wish to take note that the usable floor area of the average home in Hong Kong has remained less than 400 square feet since 1982 while real GDP per capita has more than doubled to make ours one of the world's wealthiest economies. I can think of a very good reason why demand for more residential home space should be enormous with no increase in population at all.

As to wages, they have remained roughly flat in nominal terms for the past six years while consumer prices have fallen by 15 per cent. In real terms there was thus a significant increase in wages. It will soon be so again in nominal terms too with inflation appearing once more. If property prices are correlated to wage growth, get set for another property rally. In salaries the lid already seems to have blown off the box recently.

I certainly cannot see wage pressure from across the border holding this back when wages there are rising at more than 10 per cent a year and productivity statistics show that Hong Kong workers are paid less per unit of their (much greater) production than mainland workers are.

Nor would I regard a 100 basis point increase in mortgage rates as threatening the property market. Rates for new mortgages are still less than 3 per cent. They were as high as 12 per cent in early 1998. This amounts to a 900 basis point difference. A mere 100 will not slow things down.

If you are looking for dead cats, Andy, try Shanghai. I think you may find a few of them there in need of help from your China Good line.