By AFP
The finances of some local authorities are stretched to the limit, after three years of astronomical spending to combat the Covid-19 pandemic, and above all a property crisis that has deprived them of a major source of income.
The economic context is exacerbating their difficulties, according to analysts at SinoInsider, an American consultancy specialising in China.
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SinoInsider noted that local governments are “trying various methods” to increase their revenues, at the risk of weakening businesses that have already been tested by the economic situation.***
Given the economic climate, the financial sector is reluctant to invest in traditional growth sectors, fuelling an “asset shortage”, SinoInsider said.免費獲取每週兩期簡報精選每週兩期中國政經時事分析精選，直送你的信箱。免費訂閱，隨時可取消。On the other hand, it is buying more and more “risk-free” long-term government bonds, which is driving down yields.
This is helping to depreciate the Chinese currency, with the risk of accelerating capital flight, SinoInsider warned.
