CHINA'S property market was once described as the "most important sector in the known universe" by Jonathan Anderson, formerly of UBS, a Swiss bank. It certainly felt that way on a recent visit to Sanya, the resort city in Hainan, known for its sea air and speculative vapours. Finding a real-estate agent in Sanya is as easy as buying a bucket-and-spade. Flyers advertising flats sprinkled the beachfront like sea-spray. A man on a bike handed them out to swimmers emerging from the sea. A flyer kept the sun off one man's neck and the sand off another man's shorts. I saw a couple walking along the beach with badminton rackets, a shuttlecock and, of course, a property flyer.

Nationwide, real estate accounts for about a fifth of Chinese investment, and investment contributes over half of the country's GDP growth. The industry's economic consequences are not confined to China. Australia sells the iron ore that makes the steel that makes the girders that buttress China's buildings. And these new buildings are wired with copper shipped from Chile. These global spillovers are much discussed, but rarely quantified. One attempt to do so appears in the IMF's latest article IV report on China's economy, drawing on a forthcoming working paper by Ashvin Ahuja and Alla Myrvoda. The two economists estimate the impact of a slowdown in Chinese real-estate investment on the rest of the known universe (specifically: the GDP of G20 members and the global price of various commodities). The estimates are based on a factor-augmented vector autoregression, obviously. The results suggest the spillovers are not quite as important as I'd expected. To put them in context, consider the following slowdown scenario. Investment in Chinese real estate grew by 30.2% in 2011. In the first half of this year, it grew at the much slower pace of 16.6%. Suppose that lesser pace continues for the rest of the year. Then the level of Chinese real-estate investment at the end of 2012 will be 10.4% less than it would have been had the 2011 pace continued. (10.4=100*(130.2-116.6)/130.2) The chart below shows the wider impact of that kind of slowdown.

According to these estimates, the slowdown would knock about 1% off China's GDP in 2013. That's not nothing. But it's not a disaster either. Curiously, the estimates suggest that a slowdown in Chinese real estate would do more damage to Japan and Germany than to China itself. These economies sell a lot to the Middle Kingdom, of course, and they also export a lot to other countries that are themselves vulnerable to a Chinese slowdown. So they are hurt both directly and indirectly by China's troubles. Australia, on the other hand, seems strangely impervious: a real-estate slowdown would have no impact whatsoever on Australia's GDP, the model suggests. The country's direct exposure to China is relatively large, but other forces, such as the exchange rate, would help absorb the shock. Australia does not escape entirely unscathed however. Other indicators, such as employment growth, do register a slowdown. The muted results may reflect the inherent difficulty of teasing out the effects of a single sector on a vast, interconnected economic universe, where "everything affects everything else in at least two ways". Or perhaps Chinese property is not that important after all. Even in Sanya, some people (including those pictured below) seem pretty relaxed about living in the shade of a property bubble.