  This paper aims to assess the impact of COVID-19 on the public finance of
Chinese local governments, with a particular focus on the effect of lockdown
measures on startups during the pandemic. The outbreak has placed significant
fiscal pressure on local governments, as containment measures have led to
declines in revenue and increased expenses related to public health and social
welfare. In tandem, startups have faced substantial challenges, including
reduced funding and profitability, due to the negative impact of lockdown
measures on entrepreneurship. Moreover, the pandemic has generated short- and
long-term economic shocks, affecting both employment and economic recovery. To
address these challenges, policymakers must balance health concerns with
economic development. In this regard, the government should consider
implementing more preferential policies that focus on startups to ensure their
survival and growth. Such policies may include financial assistance, tax
incentives, and regulatory flexibility to foster innovation and
entrepreneurship. By and large, the COVID-19 pandemic has had a profound impact
on both the public finance of Chinese local governments and the startup
ecosystem. Addressing the challenges faced by local governments and startups
will require a comprehensive approach that balances health and economic
considerations and includes targeted policies to support entrepreneurship and
innovation.
