Industrial properties, particularly logistics facilities, have been driven by dual forces. In the port cities, logistics demand contracted with the collapse of exports, but the surge of internal demand has led retailers to lease warehouses, especially in mid-western China.

If services are taking off in the first-tier cities, industries are surging in second- and third-tier cities. The evolution of the property market reflects these shifts in China's economic development.

Today, China has some 360 million urban residents. In the next three decades, the figure will grow to 970 million. What the central government is trying to achieve is unique - to create urban space for more than 610 million people, within a single generation. In such an environment, periods of overheating will occasionally be accompanied by dramatic price rises.

Despite its rapid pace of expansion, China's real estate is still at a very preliminary stage. The marketplace is so colossal that there are no precedents, no simple models to describe it. In the pre-global economic crisis era, Beijing was often urged to liberalize, privatize and deregulate faster. If the Chinese financial sector had actually listened to the advice, China would have followed the G7 nations to the brink of financial meltdown.

It was caution and flexibility, gradualism and pragmatic thinking that spared China then - and that can deliver the promise of China's massive urbanization tomorrow.

The author is research director of International Business at the India, China and America Institute.