China’s cities are operating out of money to pay large Covid lockdown payments

China's cities are running out of cash to pay huge Covid lockdown bills

Hong Kong
CNN Business

Protests this week across China show just how unpopular Beijing’s zero-Covid policy has become. Now, even as the country signals it may loosen pandemic controls, it faces another challenge: Local governments charged with conducting mass testing and enforcing quarantine are running short of cash and could be forced to cut corners or reduce other vital services.

The zero-Covid policy kept China out of recession in 2020. But nearly three years on, the bills are mounting, placing an extraordinary financial strain on municipal authorities across the world’s most populous nation.

If lockdowns and mass testing persist, “the financial stability risks will increase,” George Magnus, an associate at the China Centre at Oxford University, told CNN Business.

“Local governments are under huge pressure from the cost of maintaining zero-Covid, and we can…