The latest data from China shows considerable local government debts have grown faster than GDP. Given the opacity of the Chinese Communist Party’s (CCP) official data, it is likely that local government debt is much worse than reported.
China’s frequent COVID-19 outbreaks in 2022 have led to production stagnation and economic recession. Pillar industries such as real estate continued to decline. And the “zero-COVID” policy and frequency of COVID-19 nucleic acid testing led to a huge increase in local authorities’ spending and piled-up debts.
