China's Local Governments Face Squeeze From $2 Trillion in Debt

China's local governments face financial challenges due to their inability to tax, while being pressured to spend heavily, especially during the pandemic. This has led to a worsening fiscal position, exacerbated by the trade war. With a large amount of debt maturing soon, local governments are in a fiscal bind, needing to refinance debt and support economic growth.

How does the central government's taxing power affect local government finances in China?

What are the main financial challenges faced by China's local governments during the pandemic?

What impact has the trade war had on the fiscal position of local governments in China?

What are the implications of the large wall of debt maturing next year for local governments in China?

In what ways are local governments in China trying to support economic growth despite their fiscal challenges?