The optimists who believe the mainland will glide to a cyclical soft landing invariably point to its massive programme of social housing construction to support their argument that Beijing can succeed in maintaining rapid growth while tackling gaping inequalities.
On paper the programme is certainly impressive. In all, the government plans to build 36 million low-cost housing units between 2011 and 2015. According to official figures, local governments began the construction of 10 million homes in 2011, and are planning to build another 7 million this year.
The economic impact of all this activity should be considerable. If we make the conservative assumption that average construction costs are in line with original 2010 estimates of 2,000 yuan (HK$2,500) a square metre for a typical 60 square metre apartment, then the direct effects of investment in social housing would have been worth 1.2 trillion yuan last year. That's around 2.5 per cent of the mainland's gross domestic product.
Clearly, investment on such a massive scale has the potential to support economic growth, while providing much-needed housing to millions of the mainland's poorer households.
Except there's a problem. Although local governments claim to have hit last year's target of starting the construction of 10 million units, and Beijing's figures support that claim, the actual number of homes being built is far, far fewer.
We can assert that with confidence by looking at how social housing construction is being financed.
Originally, Beijing promised to meet about 10 per cent of the cost with direct fiscal transfers from the central government. That left mainland local governments still needing to raise 1 trillion yuan to meet the full construction costs of the homes they are supposed to have started building last year.
They didn't get the money by borrowing from domestic banks. Although Beijing ordered bankers to support the construction programme, data from the People's Bank of China shows the banking system extended just 175 billion yuan in loans to fund social housing projects last year.
They didn't raise the money by issuing bonds either. Local governments raised a total of 200 billion yuan from the capital markets in 2011. Nor did they get local government-owned companies to do it. Bond issuance by locally-owned enterprises came to 233 billion yuan last year.
Even if we assume that every last cent of the money raised by local governments and local government company bond issues last year went towards the construction of low-cost homes, together with the money borrowed directly from the banking system and Beijing's grant, the mainland's local governments would only have had sufficient funds to build 6 million housing units.
Of course, nowhere near all the money raised by bond issues went towards financing low-cost housing. Much of it was used to fund existing infrastructure projects and to repay bank loans run up over the previous two years by the mainland's thousands of local government investment vehicles.
In theory, there is another supply of funds that local governments could have tapped to fund social housing construction: their revenues from land sales.
At first, this looks like a promising source of cash. According to mainland media reports, over the first 11 months of last year the mainland's local governments raised an impressive 1.2 trillion yuan from land sales.
But it's unlikely much of that money was used to build low-cost housing. A sizeable portion of it should have gone to compensate the original occupants of the land, and most of the rest would have been used to fund local governments' ongoing expenditure.
In recent years the mainland's local governments have typically relied on land sales to finance about half of their spending commitments. But last year that source of funding began to dry up as Beijing's efforts to cool property prices dampened developers' demand for new building land.
As a result, the 1.2 trillion yuan local governments raised between January and December last year was actually some 30 per cent less than the amount they raised over the same period in 2010. That plunge in income has severely squeezed local governments' budgets, leaving them little room to take on ambitious new building projects.
In response, many local governments have simply fenced off plots of land, dug a few trenches, and told Beijing that they have started construction work on their quota of low-cost homes.
That dodge may have allowed them to announce that they hit their targets, but it means the mainland's social housing programme will provide nothing like the economic support the optimists hope.