Theories abound among policy watchers trying to figure out what prompted Beijing to cut interest rates this time a week ago. For anybody who doubts the admission by People's Bank of China deputy governor Hu Xiaolian that deflationary risks were the driving force, BNP Paribas economist Richard Iley offers this striking chart. It plots the ballooning of unfinished real estate projects since 2009. While real estate capital expenditure has slowed in the first 10 months of the year to single digits, Iley says "excess housing supply represents a painful deflationary millstone round the neck of the Chinese economy that will take years to work off". And that is his best-case scenario.