The Evergrande (HK:3333) saga rumbles on. Singapore-based REDD Intelligence has reported that Chinese authorities plan to exclude debt accrued by property developers in relation to distressed assets when assessing their adherence to the 'three red lines' policy.
The latter initiative was introduced in August 2020 to constrain debt ratios within China’s massively indebted property-development sector, specifically liability-to-assets, net gearing and cash-to-short-term debt.
You never feel quite confident when quoting state-sanctioned economic data from China, but there were signs that the effective forced deleveraging had taken some of the steam out of the local property market. It even initially resulted in several rating upgrades of real estate developers.