China’s Cities Struggle Under Trillions of Dollars of Debt


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The city of Zhengzhou in China has seen its fiscal revenue drop and total debt grow in recent years. As China tries to turn the page on one of its worst stretches of growth since the 1970s, its economy is being weighed down by the colossal debts of its local governments, which swelled during the pandemic and are starting to come to a head. Xi Jinping ’s zero-Covid campaign saddled cities with billions of dollars in unplanned expenditures for mass testing and lockdowns. The Chinese leader’s crackdown on excessive property-market leverage led to a sharp drop in land sales, depriving...