The deep recession in China's real estate market is becoming a major problem for the country as well as for the world's economy.

The property market was one of the few cherished destinations for household savings, with developers and home buyers also willing to take loans from the banks.

But these good days for China ended last year. Household debt touched over US$10 trillion, and around 27% of bank loans in China are tied to real estate, reported a think tank, Policy Research Group (POREG).

This industry was known to be the biggest job creator in China, but now it is termed as the "Lehman moment" - a reference to the 2008 bankruptcy of Lehman Brothers, which was a trigger for the global financial crisis. More so, when the number of empty homes has crossed the 65 million mark (90 million

according to some estimates) - enough to house the population of France - and raised the spectre of a global economy on crutches.

The housing market in China is now seen as 'a national threat' as prices rise sky-high, just like the buildings, according to POREG, citing the New York Times.

Developers borrowed money in the form of onshore and offshore bonds, trust loans, and wealth management products, in addition to bank loans. Thus, lenders span from institutions to the general people both at home and overseas.

Interestingly, Beijing's assault on property debt is part of the country's battle to control corporate debt. Much of the corporate is held by the state-owned firms (SOEs) in which over-indebtedness is the root of the problem with one difference: For SOEs, the debt is laced with government guarantees, and hence there is no imminent threat of liquidation.