On January 23, 2024, Faculty of Finance at City University of Macau organized the twelfth Finance Salon (2023-2024) at the Taipa campus. The seminar was hosted by Dr. Zheng Xian from Jinan University. Dr. Zheng delivered a lecture on his research paper titled " Beyond the "Three Red Lines": Financing Constraints and the Performance of China's Listed Real Estate Firms". This paper explores the impact of the “Three Red Lines” policy on financing constraints for real estate companies. The "Three Red Lines" policy, introduced in 2020, represents an unprecedented initiative to regulate the interest-bearing debt scale of property developers intricately. This policy endeavors to constrict the channels of financing supply and buyer demand concurrently, thereby intensifying the macroeconomic regulation of the real estate market. The paper adopts a multi-period difference-in-differences model to explore the impact of financing constraints on real estate firms. Results show a 4.43% decline in operating income growth, a 23% decrease in earnings per share, and a slight increase of 0.1% in stock return volatility. The impact varies across companies, depending on ownership, size, and regional factors. The policy also increases financing costs, limiting unchecked growth and showing spillover effects distinct from those in non-real estate sectors. Overall, this paper contributes to understanding how external financing constraints affect corporate operations, offering insights for industries aiming to limit reckless expansion through similar policies.

Dr. Zheng is currently Dean of Jinan University – University of Birmingham Joint Institute and a Professor of School of Economics at Jinan University. His research focuses on urban economics, real estate economics, micrometrics. He has published articles in journals such as Land Use Policy, China Economic Review, Applied Economics, Habitat International.

At this Finance Salon, Dr. Zheng had in-depth exchanges with teachers and students of Faculty of Finance, deepening their understanding of market regulation policies and the impact of financing constraints on real estate companies. The Finance Salon organized by Faculty of Finance at City University of Macau serves as a platform for exchanging academic ideas and fostering academic awareness. With finance as the main focus, we invite senior scholars/experts from academia and the financial industry to engage in research discussions on cutting-edge topics and share industry development trends, aiming to provide a fresh academic experience and thinking model for CityU students and members of the faculty. Through activities like the Finance Salon, we hope to offer graduate students a better academic platform, encouraging further exploration and research on academic issues.