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Three red lines

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The three red lines (Simplified Chinese: 三条红线, Traditional Chinese: 三條紅線, Pinyin: sān tiáo hóng xiàn) are financial regulatory guidelines in the People's Republic of China introduced in August 2020 relating to the ratio of debt to cash, equity, and assets. It was introduced to help rein in the highly indebted property-development sector in China, seen especially in large real estate concerns such as Evergrande, which faced a liquidity crisis in Q4 2021.

Xi JinpingXi JinpingPersonal detailsBorn (1953-06-15) 15 June 1953Beijing, ChinaPartyCommunist Party of China (since 1974)SpousesKe Lingling​​(m. 1979; div.Chinese Communist PartyChinese Communist PartyGoverning party of the People's Republic of ChinaAbbreviationChinese中共Hanyu PinyinZhōnggòngTibetan nameTibetanཀྲུང་གོ་གུང་ཁྲན་ཏངZhuang nameZhuangCunghgoz GungcanjdangjMongolian nameMongolian CyrillicДундад улсын (Хятадын) Эв хамт (Kоммунист) НамMongolian scriptᠳᠤᠮᠳᠠᠳᠤ ᠤᠯᠤᠰ ᠤᠨ(ᠬᠢᠲᠠᠳ ᠤᠨ)ᠡᠪ ᠬᠠᠮᠲᠤ(ᠺᠣᠮᠮᠤᠶᠢᠨᠢᠰᠲ)ᠨᠠᠮUyghur nameUyghurجۇڭگو كوممۇنىستىك پارتىيىسى‎ The Communist Party of China (CPC), commonly known as the Chinese Communist Party (CCP), is the founding and sole governing party of the People's Republic of China (PRC).General Secretary of the Chinese Communist PartyGeneral Secretary of the Chinese Communist PartyThe general secretary of the Central Committee of the Chinese Communist Party is the leader of the Chinese Communist Party (CCP), the sole ruling party of the People's Republic of China (PRC). The general secretary leads the CCP Central Committee. Since 1989, the general secretary has been the country's paramount leader. The general secretary has also been the political chief position of China (above the president and premier) since 1982.Chinese real estate crisis (2020–present)Chinese real estate crisis (2020–present)Financial crisis This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these messages) You can help expand this article with text translated from the corresponding article in Chinese. (June 2025) Click [show] for important translation instructions. View a machine-translated version of the Chinese article.Evergrande GroupEvergrande GroupFormer Chinese property development companyThe China Evergrande Group was a Chinese property development company. Before its dissolution in 2024, it had become the second largest property developer in China by sales and the most valuable real estate company worldwide. Evergrande's sudden collapse in 2021 sparked the ongoing Chinese property sector crisis. Evergrande was founded in 1996 by Hui Ka Yan (Xu Jiayin). It sold apartments mostly to upper- and middle-income earners.Equity (finance)Equity (finance)In finance, equity is an ownership interest in property that may be subject to debts or other liabilities. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets owned. For example, if someone owns a car worth $24,000 and owes $10,000 on the loan used to buy the car, the difference of $14,000 is equity. Equity can apply to a single asset, such as a car or house, or to an entire business.AssetAssetIn financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent the value of ownership that can be converted into cash (although cash itself is also considered an asset). The balance sheet of a firm records the monetary value of the assets owned by that firm.Financial regulationFinancial regulationRules or restrictions for financial institutions Financial regulation is a broad set of policies that apply to the financial sector in most jurisdictions, justified by two main features of finance: systemic risk, which implies that the failure of financial firms involves public interest considerations; and information asymmetry, which justifies curbs on freedom of contract in selected areas of financial services, particularly those that involve retail clients and/or principal–agent problems.DebtDebtDebt is an obligation that requires one party, the debtor, to pay money borrowed or otherwise withheld from another party, the creditor. Debt may be owed by a sovereign state or country, local government, company, or an individual. Commercial debt is generally subject to contractual terms regarding the amount and timing of repayments of principal and interest. Loans, bonds, notes, and mortgages are all types of debt.CashCashCash is money in the tangible form of currency, such as banknotes and coins. In book-keeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-immediately (as in the case of money market accounts). Cash is seen either as a reserve for payments, in case of a structural or incidental negative cash flow, or as a way to avoid a downturn on financial markets.RatioRatioIn mathematics, a ratio () shows how many times one number contains another. For example, if there are eight oranges and six lemons in a bowl of fruit, then the ratio of oranges to lemons is eight to six (that is, 8:6, which is equivalent to the ratio 4:3). Similarly, the ratio of lemons to oranges is 6:8 (or 3:4) and the ratio of oranges to the total amount of fruit is 8:14 (or 4:7).ChinaChinaCountry in East AsiaChina, officially the People's Republic of China (PRC), is a country in East Asia. It is divided into 33 province-level divisions, including two special administrative regions. Beijing is the capital, while Shanghai is the most populous city by urban area. Its geography features the Central Plain, major rivers such as the Yangtze and Yellow River, deserts, subtropical and temperate forests, plateaus, and mountain ranges such as the Himalayas.

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