China’s Provinces Suffer Major Fiscal Hit From Covid Zero
- Almost all provinces posted a deficit in first seven months
- Government finances squeezed by falling land sales, tax cuts
Nearly empty roads amid restrictions due to an outbreak of the Covid-19 coronavirus in Chengdu, in China's southwestern Sichuan province, on Sept. 1.
Source: CNS/AFP/Getty Images
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China’s doubling down on its zero-tolerance stance toward Covid-19 is draining local-government coffers, posing a fresh threat to the economy and bond investors.
Jilin province, in the northeast of the country, has warned of “increasingly outstanding conflicts” between spending and income. Finances at almost half of of its 60 county and district level governments are so tight they are exposed to “operational risks,” the provincial finance department said in its first-half budget execution report released last month.