More trouble for China’s rural commercial banks is more or less inevitable unless the property market turns around soon. A protest by bank depositors in the province of Henan has been put down forcibly. Meanwhile, home buyers with mortgages—but not yet finished apartments—throughout China are making noises about halting payment . For a Chinese economy already in significant trouble, these are eye-opening headlines. The problems in Henan are partly about a discrete case of financial malfeasance—an investigation by China’s banking regulators found that a private investment group called Henan New Wealth Group has been illicitly siphoning off deposits from small banks. But they come against an extremely worrying backdrop. Property prices in small Chinese cities are falling rapidly. Developers, unable to access finance and watching their sales dry up, have halted construction on many presold homes—and the online movement to halt mortgage payments threatens to compound their woes by […]