(Bloomberg) -- A senior official at the People’s Bank of China says he’s sanguine about the economy because some debt risks will recede and the property market has long-term potential.

Global investors have concerns about the Chinese economy including its pace of recovery, and with problems related to real estate and local government borrowing, Deputy Governor Zhang Qingsong acknowledged in a speech in English at a global finance summit held by Hong Kong’s de facto central bank.

“You may ask me, are you worried? No, not always, not too much,” he said. “From a long-term perspective, the fundamentals of the Chinese economy remain stable and promising.”

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The Asian nation’s economic growth improved in the third quarter, driven by stronger consumer spending. The recovery is fragile, however, as evidenced by data Tuesday showing that an export slump unexpectedly deepened in October.

Zhang said the economy has faced challenges this year after three years of the pandemic but it remained resilient overall.

China’s local government debt is a structural issue, and the risks to certain regions will recede gradually, Zhang said. While some provinces may face pressure servicing their obligations, most of their borrowing is backed by physical assets, he said, adding that the country aims build a long-term mechanism to solve the problem.

Zhang called the difficulties facing the housing sector “natural selection and market-clearing process” as supply and demand shifted following years of rapid growth in the industry. China needs to manage the market carefully to avoid sharp downturns and unintended consequences, he said.

He added the country still has a lot of room for urbanization while households continue to have strong demand for bigger homes.

Other highlights of the speech:

  • The country can work to increase the accountability of certain local governments, though he didn’t name any
  • China has well-designed long-term economic policy programs
  • The nation must transition from the old growth model driven by property and infrastructure to innovative, green development as the former is no longer sustainable

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