As we approach the end of the calendar year, we'll start to hear investment houses form their views on the financial market outlook for 2018, and subsequent asset classes to invest in or to avoid.
Over previous economic cycles, the world's most important asset classes have varied from the US dollar, to global bond markets, to the price of oil, or in more recent times, buoyant equity markets.
So, what is the most important asset class now? The answer: Chinese real estate.
The health of the Chinese property market drives global demand for coal, iron ore, aluminium, oil, copper, steel, natural gas as well as a raft of capital goods.
It is no secret that New Zealand economic wellbeing is tied to that of China - along with Australia, it's one of our biggest export markets. Beyond that, the other transition channel that benefits the New Zealand economy is via the Chinese 'wealth effect' - where appreciating house prices give Chinese households the ability to spend more, and spending they are.
Wealthy Chinese households are big spenders on travel and overseas education, and have had a significant direct impact on these sectors in New Zealand in recent years, underpinning a large proportion of growth for companies such as Auckland Airport and Tourism Holdings, to name just a couple.
Via the wealth effect, growth in Chinese property prices also gives rise to the demand for luxury goods, hospitality and general retail of every description.
If we think about a slightly more pessimistic scenario, a significant slowing in Chinese housing would likely signal lower demand for commodities and capital goods. Overall confidence in the economy would decline and the usual fears around capital flight will re-emerge.
Estimates indicate that over half of the private wealth in China is tied up in real estate – meaning a downturn in property prices in China will likely lead to a material cut to demand in all these end markets globally.
So what are the chances of a Chinese property collapse?
The latest statistics show that house prices have increased in each of the past 29 months.
At the beginning of 2016, housing and real estate more broadly were rising at an annual rate of upwards of 50 per cent in cities such as Beijing, Shanghai and Shenzhen.
Regulators have since moved to cool these rapidly rising house prices but the risks seem clear.
However, for all the doomsday predictions out there, whether it is rampant oversupply or building of 'ghost cities', the outlook appears somewhat rosier.
Latest statistics suggest China needs to keep building around 800 million sqm of residential real estate each year for the next 25 years to house the more than one billion people projected to be living in modest apartments in Chinese cities by 2040.
Residential construction in 2016 was consistent with this rate, and so in theory, this theme could have decades to run; global financial markets certainly hope so.