China’s Latest Local Government Debt Risk — Covid Facilities

China’s local governments have been under pressure this year to boost infrastructure investment to shore up economic growth, but some have invested millions and sometimes billions of yuan on projects that may bring in little revenue — centralized Covid quarantine facilities.

These are usually temporary structures, sometimes converted stadiums, where people are sent to quarantine after testing positive for the coronavirus but have few, if any, symptoms, or after they’ve been identified as close contacts of Covid cases. Some of the facilities are known as “fangcang” hospitals (方舱医院).