It’s a strategy that has massive economic consequences.
China has kept its zero-tolerance stance on COVID through 2022.
This means that any outbreaks of COVID are met with aggressive regional lockdowns to minimize spread.
Budget deficits have soared as local governments have tried to cover the tab for economic losses.
For a nation that prides itself on massive economic output and exports to the rest of the world, this has major consequences.
And has massive repercussions for the commodities market.
A Taxing Time…
China has 31 provinces; Shanghai is the only province to not be in deficit.
That means 97% of Chinese provinces are spending more than they are receiving back in tax revenue.