What if cash-strapped Chinese provinces start delaying civil-servant pay?
Provincial wage arrears are a fiscal-credibility tell, not a Lehman event: the clean trade is short the China-beta complex (copper, KWEB/Alibaba, AUD) as local-government financing vehicles signal stress, with miners like Freeport leading metal lower. Rhymes with the 2021 Kaisa/Evergrande LGFV scare — copper and AUD bled but global contagion stayed contained because the channel is domestic demand, not dollar funding. Forward angle: unlike 2021, Beijing's reluctance to backstop provinces directly is the new fat tail.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 6–18 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. Cash-strapped Chinese provinces delay teacher and police salaries, sparking scattered protests and a fiscal-credibility shock. The trigger decomposes into signed root‑shocks — China growth ▼ · Credit spreads ▲ — which propagate through our causal graph to the markets below.