Getting China Onboard a Global Debt Governance System
China has become the number one provider of development finance in the world. Because of its significant share in Low and Middle Income Countries’ (LMICs) external debt, China should take up responsibilities and cooperate with traditional development finance providers, but its particular lending style and distinct approach to debt management pose many challenges and do not make international cooperation straightforward.
Although some progress could be observed over the past couple of years under various initiatives such as the Debt Service Suspension Initiative, the Common Framework and the Global Sovereign Debt Roundtable, more remains to be done. But as China is increasingly faced with the same difficulties as other lenders, and in particular with rising risks of default, one may be reasonably confident that China will behave increasingly like other lenders.
In concrete terms, the EU should push the topic of debt management on the G20 agenda so as to encourage a constructive discussion with China. It is also important to avoid ill-founded criticisms that are simply counterproductive. The EU should call for more transparency and encourage the streamlining of lending practices and approaches to debt restructuring. It is in all countries’ interest to design an effective multilateralized debt management mechanism.
ReConnect China is a research project dedicated to strengthening independent knowledge on China in Europe. Funded as part of the European Commission’s Horizon Europe program, the four-year project brings together 15 institutions and 66 researchers across 12 European countries. Ifri will contribute policy briefs such as this one throughout the lifespan of the project, ranging from science and technology to China’s economy to foreign policy and China’s place in international affairs.
Also available in:
Themes and regions
Share
Download the full analysis
This page contains only a summary of our work. If you would like to have access to all the information from our research on the subject, you can download the full version in PDF format.
Getting China Onboard a Global Debt Governance System
Related centers and programs
Discover our other research centers and programsFind out more
Discover all our analysesDeployment of the French Frigate Bretagne in the Indo-Pacific: Implementing French Strategy in the Region
The deployment of the French Navy’s multi-mission frigate (FREMM) Bretagne in the Indo-Pacific in recent months demonstrates France’s capability to project power far from the mainland and solidifies its Indo-Pacific strategy.
Japan’s Enhanced Security Engagement With the Pacific Islands
The expansion of security and defense cooperation stands as the most spectacular change in Japan’s contribution to the region in recent years.
National Perspectives on Europe's De-risking from China
The concept of “de-risking” has become a significant focus for the European Union (EU) in managing its relations with China since first proposed by European Commission President Ursula von der Leyen in March 2023. However, the interpretation and policy responses to de-risking vary across Europe, reflecting diverse national perspectives.
Foreign Policy Issues in the BJP 2024 Election Campaign: Boosting National Pride and Glorifying a Strong Government
While election campaigns in India traditionally focus on domestic issues above all, the Bharatiya Janata Party’s (BJP) campaign for the 2024 general elections placed a strong emphasis on foreign policy. It emphasized how, under the leadership of Prime Minister Narendra Modi, India has strengthened its diplomatic role and achieved international economic success.