China’s Local Governments Hold Back Wages in Desperate Scrape for Cash Beijing’s recent attempt to address municipalities’ trillions in hidden debt only scratches the surface ONG KONG—In Shanwei, a city on China’s southeastern coast, dozens of medical staff took over the hall of a public hospital last month to demand wages and bonuses that hadn’t been paid. Wearing white coats and scrubs, some held up pieces of paper that read, “We need to eat.” A few weeks earlier, retired city employees of Yichun in northeastern China gathered to protest months of missing pension payouts. While labor disputes aren’t uncommon in China, a recent increase in such incidents emerging on social media suggests many of the country’s local governments are strapped for cash. Cities across the country are struggling with trillions in debt—much borrowed off the books—as traditional sources of revenue such as land sales have waned. An attempt this month by Beijing to address the problem of local governments’...