BEIJING (AP) — China's central bank expanded the supply of money for lending Monday as Beijing tried to reassure its public and investors the economy can be protected if a troubled real estate developer's $310 billion mountain of debt collapses.

Evergrande Group's struggle to turn assets into cash has prompted fear a default might chill Chinese lending markets and cause global shockwaves. Economists say the ruling Communist Party can prevent a credit crunch but it wants to avoid sending the wrong signal by bailing out Evergrande in the middle of a campaign to force companies to cut debt Beijing worries is dangerously high.

The People's Bank of China said it released 1.2 trillion yuan ($190 billion) for lending by reducing the amount of money banks must hold in reserve. Beijing was expected to show support for lending after Evergrande warned Friday night it might run out of cash, but the central bank made no mention of the company, which it earlier accused of reckless borrowing.

"The company must be punished," said economist He Fan at Peking University's HSBC Business School.

Developers have been racing to pay off debt since Beijing lowered limits on their use of borrowed money last year. Weaker real estate activity depressed economic growth to an unexpectedly low 4.9% over a year earlier in the last quarter.

The People's Bank said it wants to "support development of the real economy." It said the reserve cut was no change in "prudent monetary policy."

If Evergrande defaults, Beijing is likely to launch a two-track strategy of pumping money into credit markets while trying to prevent home prices from crashing if developers dump apartments in a "fire sale" to raise cash, said ING economist Iris Pang.

"It will be more of a semi-controlled market if that happens," Pang said.

Chinese leaders have coped with corporate debt crises but none as big as Evergrande.

The government in the southern province of Hainan seized HNA Group, an airline operator, in 2020 after it amassed $61 billion in debt during a global acquisition spree. The company in September proposed a plan under which creditors would be paid about 40% of what they are owed.

Reducing financial risks has been a priority for Chinese leaders since 2018. In 2014, they allowed the first bond default since the communists came to power in 1949. Defaults have gradually been allowed to increase in hopes of forcing borrowers and investors to be more disciplined.

Despite that, total corporate, government and household debt rose from the equivalent of 270% of annual economic output in 2018 to nearly 300% last year, unusually high for a middle-income country.

Beijing reduced amounts real estate developers are allowed to borrow relative to their size last year. That blocks many from issuing new debt to pay off bonds as they mature.

Fantasia Holdings Group said Oct. 5 it failed to make a $205.7 million payment due to bondholders. Kaisa Group Holdings Ltd., warned last week it might fail to pay off a $400 million bond due Tuesday.

Economic growth might sink further, but "the government believes the transformation of economic structures is more important," said Peking University's He.

The government of Evergrande's home province of Guangdong said it would send risk managers to the company's headquarters in the southern city of Shenzhen. Other provinces and major cities have set up "risk mitigation teams."

"There is no good news," the newspaper Economic Observer quoted a risk team member as saying. He said the public sees "only the tip of an iceberg" of Evergrande's problems.

Those problems are due to Evergrande's "poor management and blind expansion," the central bank said Friday in an unusually stinging statement.

Regulators also are trying to root out hidden real estate investment risks at insurers and banks.

Insurers were ordered in November to disclose investment details, the business news magazine Caixin reported. It said regulators cited possible "illicit financing" but gave no details.

Economists say Evergrande won't be a "Lehman moment," a reference to the 2008 collapse of Wall Street bank Lehman Brothers, the symbolic start of the global crisis.

Unlike banks and securities firms whose assets are mostly claims on other financial institutions, Evergrande's 2.3 trillion yuan ($350 billion) portfolio is land, half-built apartments and share in companies, which have a market price.

That means Evergrande's cash crunch "will have no negative impact" on banks or insurers, the bank regulator said in a statement.

But land is known as an illiquid asset, or one that takes time to sell. A $2.6 billion sale of a stake in an Evergrande subsidiary fell through in October.

Under pressure from Beijing to pay out of his own pocket, billionaire chairman Xu Jiayin sold $344 million of Evergrande stock in November.

Xu also borrowed $105 million, pledging two houses in Hong Kong's tony Black's Link district as collateral, according to Caixin.

Evergrande said Friday it has received a demand to pay a $260 million debt. Other obligations include a $255 million payment of bond interest due Dec. 28.

Those are relatively small parts of its total borrowing, but Evergrande warned Friday that missing a payment might trigger demands to repay other debts immediately. That could push the total due into billions of dollars.

Evergrande has avoided defaulting by making payments to bondholders on the final day of a grace period before it would be declared in default. It's unclear where that money came from.

Meanwhile, other real estate companies have been allowed to issue new debt, possibly to reassure the public the industry is healthy.

Total bonds sold by real estate companies in November rose 84% over the previous month to 47.1 billion yuan ($7.4 billion, according to the newspaper China Securities News.

To support housing sales, state-owned banks have speeded up the borrowing process for buyers and cut costs, according to the newspaper Securities Daily.

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AP researcher Yu Bing contributed.