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Bond Market News
China Drops “Three Red Lines” Policy – Reports
January 30, 2026
Chinese property developers surged after a local media report which suggested that regulators have dropped the requirement for developers to submit the “three red lines” debt metrics. The policy was introduced in 2021 to curb excessive leverage in the real estate sector. Some analysts also noted that funding challenges would continue to persist even without the limits, as most private developers are still grappling with debt restructuring, while state-owned firms still need to comply with other regulatory requirements to take on more borrowing. Shares of real estate developers like China Overseas and Longfor both gained 6% on the news and the CSI 300 Real Estate Index climbed 5% to its highest level in two months. The move comes amid broader efforts of the government to support its real estate sector, including easing purchase curbs and lowering borrowing costs.
Dollar bonds of distressed real estate developers like Kaisa and Country Garden also ticked up by a few cents on the dollar.
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