China economy: Financial distress of local governments raises debt-default risks, weighs on average Chinese

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Growing financial distress in regions across China is raising the risk of local governments defaulting on their bonds, as the nation presses on with its costly zero-Covid strategy.

The weakening of local government finances has been of growing concern in recent weeks, triggering questions about whether local Chinese authorities will need to cut back on spending in public services, and about the overall rising costs of keeping nationwide coronavirus-curbing measures in place.