Finance

Despite the looming debt pile, local governments are also under pressure to drive spending on science and technology as Beijing is increasingly shunned by the West.

Provincial governments accounted for at least 60% of the total government expenditure on technology in 2022, the Rhodium Group said in a report in December 2023.

Chinese finance news group Caixin Global reported that China’s local governments made bond interest payments worth $174 billion last year alone. That was a record figure — up by almost 10% from 2022.

An improvement in the financial health of local governments will be challenging this year as well, as the world’s second largest economy continues to struggle in its post-Covid recovery, the property market slump drags on and the state of Chinese developers continues to worsen.