A few months ago, Chinese leaders were basking in signs that the world’s second-largest economy was rebounding sharply after three years of tough Covid-19 controls.
By April and May, however, disturbing reports were trickling in. Teams sent to conduct surveys of local-government finances returned to Beijing with news that officials were struggling to repay debts, people familiar with the matter said. Government meetings with regional business leaders revealed that confidence remained weak, even after the unexpected lifting of Covid restrictions late last year.