Even widows and orphans are now worried about the property bubble brewing on the mainland. Look up some key numbers and you can understand why. Nationwide property sales soared more than 75 per cent last year from 2008 to hit a whopping 4.4 trillion yuan (HK$5 trillion). In Shanghai, the second hottest property market on the mainland, home loans rose an unbelievable 1,600 per cent year on year to 99.58 billion yuan. Bubble or not, that is simply too much, too fast for many people - especially the central government. Investors are clearly worried. The latest news is that the 8.7 per cent growth rate last year may have propelled the mainland economy past Japan to become the world's second largest. Instead of cheering, that had the perverse effect of pulling down stock markets as people worried about further tightening measures. In a new report, the World Bank warns of 'signs of bubbles' in the mainland economy, especially in the property sector. So, is China's growth story about to turn into a horror tale? Like it or not, the housing market has become closely tied to the country's economic fortunes. The reason is that the residential construction boom has been the main sector where private investment has shown a significant rise in the past year. A dive in the property market will, therefore, have repercussions for the rest of the economy as the central government tries to withdraw stimulus programmes. More private investment needs to step into the government's place, but so far it is developers and builders who have shown the most commitment. What if they, too, are about to get their fingers burned? In an alarming sign, Evergrande Real Estate Group, the nation's largest developer, will need to pay an eye-popping 13 per cent interest in order to sell US$500 million of bonds. The central government is more worried than most and has taken steps to tackle asset bubbles. Banks have been told to tighten lending standards and put up more reserves from deposits. The provision of subsidised housing for the poor and needy has become a priority. A honeymoon tax break on property resales, introduced last year to boost property transactions, has been rescinded. Whether the anti-bubble measures taken so far are up to the task is debatable. After flooding the economy in liquidity amid the global downturn, the central government now needs to tighten up - without choking off recovery. While Beijing is ever ready to take ruthless action when it comes to suppressing political dissent, it is almost timid when it concerns cooling markets. It's a case of once bitten, twice shy. In late 2007, the property market took a nosedive and new construction halted after the government's ill-fated effort to deflate a market bubble. The attempt exacerbated a market collapse that reached a nadir in March before recovering. Now the stakes are much higher for the central government. Like governments of most other major economies, Beijing faces the dilemma of reversing loose monetary conditions and withdrawing fiscal support without choking off nascent growth. It wants to take away the punch bowl but is afraid it might crash the market. The Chinese economy is at a turning point. To become the world's second largest economy is one thing, but to maintain this position will test the skills - and try the luck - of the central government and regulators. Cooling the red-hot market - and if it suffers a serious correction, containing the fallout - will be a major test of Beijing's economic management skills.