BEIJING (AP) — China’s vast real estate industry is recovering from a slump triggered by tighter debt controls, a deputy central bank governor said Friday, after a wave of defaults by developers rattled global financial markets.

Pan Gongsheng mentioned Evergrande Group, the global industry’s most heavily indebted developer, but gave no update on its government-supervised efforts to restructure 2.1 trillion yuan ($305 billion) in debt to banks and bondholders.

“Market confidence is recovering. Transaction activity in the real estate market has increased,” said Pan at a news conference ahead of the meeting of China’s legislature. “The financing environment, especially for high-quality enterprises, has significantly improved.”

Pan gave no indication that Beijing planned significant changes in its debt controls, known as the “three red lines.”

China’s economic growth slid in mid-2021 after regulators who worried debt levels were dangerously high blocked Evergrande and other heavily indebted developers from borrowing more money. That added to disruption from anti-virus controls.

Some developers collapsed and others defaulted on billions of dollars of debts to Chinese and foreign bond investors. Evergrande has said it has 2.3 trillion yuan ($330 billion) in assets but is struggling to convert that into cash to repay lenders.

Local governments took over some unfinished projects to make sure families got apartments that already were paid for.

In the final quarter of 2022, bond sales by developers rose 22% compared with a year earlier to 120 billion yuan ($17.5 billion), according to Pan. He said bank loans for real estate development also increased.

Meanwhile, the central bank governor said Beijing plans to keep the politically sensitive exchange rate of its yuan stable after it tumbled to a 14-year low against the US dollar in September.

The exchange rate “will remain basically stable at a reasonable and balanced level,” Yi Gang said at the event with Pan.

The central bank intervened to stop the yuan’s slide after traders shifted money into dollars to profit from Federal Reserve interest rate hikes.

The exchange rate might face further pressure because more US rate hikes are expected to cool economic activity and stubbornly high inflation while Beijing is easing lending controls to shore up sluggish economic growth.

A weaker yuan helps Chinese exporters by making their goods cheaper for foreign buyers, but it encourages capital to flow abroad. That raises borrowing costs in China.

The People’s Bank of China allows the yuan to trade within a narrow band around a rate set each morning. The central bank has tried to improve the financial system’s efficiency by making that mechanism more flexible but has been backtracked to stop big changes in the exchange rate.

Yi, a former economics professor at Indiana University, and other People’s Bank leaders are due to be replaced this month in a once-a-decade change of government that will install supporters of Chinese leader Xi Jinping in key economic posts.

Yi noted the yuan has fallen below the symbolically significant level of seven to the dollar three times.

“The stability of economic and social expectations is very important,” he said.

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