China’s cities are running out of cash to pay huge Covid lockdown bills By Laura He, CNN Business Protests this week across China show just how unpopular Beijing’s zero-Covid policy has become.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 already see this in the debt sustainability of several entities and [in] instances where public services are being scaled back, local assets or services sold and so on.” Local governments, whose revenues rely heavily on land sales, are more vulnerable than the central government.It not only increases the risk that municipalities will default on their debts, but also squeezes the government’s ability to spur growth, stabilize employment, and expand public services.Local government finances are also being stretched by a sharp contraction in revenue as feeble economic growth and huge tax breaks for businesses reduce income."