How a housing downturn could wreck China’s growth model

ADD “MALICIOUS price-cutting” to the growing lexicon of Xi Jinping’s China. The phrase has cropped up in the past but is being increasingly used by provincial authorities to decry property developers’ attempts to slash home prices. Some developers, desperate to bring in revenue, are offering discounts of as much as 30%. Officials, fearing that the price cuts might frustrate recent homebuyers and lead to protests and distortions in the property market, regard the discounts as undermining social stability and have banned them. In the central city of Yueyang the government has told developers to stop increasing prices but also to refrain from reducing them by more than 15%.