30 minutes ago, in a major development, China's government may ease their "Three Red Lines" policy on the real estate market. The three red lines were introduced in August 2020. They stated property companies should adhere to the following rules: 1. Liabilities should not exceed 70% of assets (excluding advance proceeds from projects sold); 2. Net debt shouldn't be greater than 100% equity; 3) Money reserves (cash) must be at least 100% of short-term debt. This rule was put in place to de-lever the real estate market and ultimately contributed to a liquidity crisis. Will we also have a modification of the “houses are for living in, not speculation” statement? It hasn't happened yet. In the past week, the government introduced a bevy of adjustments in the property market to support first-time buyers and boost demand. Real estate is very important in China, accounting for ~30% of GDP.