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The supply of apartments is increased by firms that build apartments. In China you don't actually own the land the building is on anyway.
Not hard to understand.
Better pop the bubble when it's still managable. Without the three red lines, over time you get into a situation like sitting on a million megatons of TNT drowned on petrol while smoking a cigar. >

Mmm, I'm not questioning whether it's wise to deflate the bubble, but it seems strange to deflate it by immediately bankrupting one of your largest real estate firms (lowering supply). A sudden collapse is typically way more painful than a slow one after all, especially right after zero-covid lockdowns.
Why not, for example, set a higher debt ratio limit, then have pre-set points where the limit lowers? Or open investment into foreign equity to let some air out of real estate? Or any number of slower ways?
Basically, why Three Red Lines specifically. I would have thought the CCP was aware, or capable of being aware of the debt levels that Evergrande (and other real estate firms) were running at. >


Mmm, I'm not questioning whether it's wise to deflate the bubble, but it seems strange to deflate it by immediately bankrupting one of your largest real estate firms (lowering supply).

How does it lower supply? The CCP can just take that land and redistribute it.