Evergrande’s slow-motion collapse spilled over into China’s real estate industry on Monday, as real estate stocks fell despite assurances from Beijing that they would back “quality” companies.

Shares of Chinese Estates Holdings, a Hong Kong-based real estate group, fell 35.2% after an unsuccessful bid to privatize the company and reduce its exposure to Evergrande.

The group, controlled by the family of Hong Kong billionaire Joseph Lau, had been a major investor in the world’s most indebted developer and its other businesses, including its electric vehicle unit.

Shares of Kaisa, one of the largest companies at the heart of the liquidity crunch in China’s real estate sector, fell 15.2%. Kaisa was demoted in default with Evergrande on December 9 after missing a $ 400 million bond payment.

The company announced in a stock exchange report that it had appointed Houlihan Lokey, the U.S. investment bank advising Evergrande, as financial advisor to address its liquidity issues. He added that he was in talks with bondholders over a restructuring plan.

The Hang Seng Mainland Properties Index, which tracks the Hong Kong-listed stocks of 10 of China’s top developers, lost as much as 5.3%, putting it on track for its fifth daily decline in the past seven trading sessions.

The unrest at Evergrande, a real estate developer with $ 300 billion in liabilities, follows Beijing’s introduction of new regulations last year to reduce leverage in the overheated real estate market.

Beijing is working to limit the contagion of the collapse of Evergrande on the real estate sector which is a major engine of the country’s economy.

China’s central bank and banking regulator have urged the country’s financial institutions to support “high-quality” real estate investments, according to a report released Monday by Financial News, a media organization partly backed by the People’s Bank of China.

The PBoC has also held meetings with major real estate companies and banks nationwide to encourage healthy operators to acquire projects from struggling groups in the industry, Financial News said. He also urged banks not to withdraw loans from subprime developers.

China on Monday lowered a key lending rate key for national banks to counter a loss of economic dynamism. The central bank has lowered the prime rate on one-year loans to tackle the crisis in the real estate sector, the impact of the coronavirus pandemic and weak consumer activity.

The move came after the PBoC reduced the level of reserves that banks must maintain in early December, pumping around 1.2 billion Rmb ($ 200 billion) into the financial system.