Commentary Many of China’s local authorities are staring down a severe fiscal challenge this year. The typically robust real estate sector has instead been a big disappointment. The country’s ongoing property market slump has hit local government revenues. We’ve previously pointed out land sale revenues as being a major component of local budgets, and China’s contemplated rollout of personal real estate taxes are unlikely to give municipalities a major windfall. China’s macroeconomic environment has become a huge drag. The central government in Beijing is looking to implement more tax cuts to offset slowing economic growth and promote small business growth. This is another drain on local government resources, but is necessary given China’s COVID restrictions continue to hold back economic activity across the nation. On top of that, many municipalities’ already high debt burden will prevent them from accessing debt financing. “The country will intensify tax-deduction efforts and launch targeted …