China's rise and the reshaping of sovereign debt relief

Abstract China has become the world's largest bilateral creditor to low- and middle-income countries, yet its participation in collective debt-relief frameworks led by western multilateral institutions—the International Monetary Fund, World Bank Paris Club—has not met those institutions' expectations. Prevailing discussion perceives China's ‘reserved’ as free-riding on or contesting international sovereign debt regime. This article advances ongoing drawing a historical parallel between current approach that of United States institutions during after crisis 1980s. The finds towards end 1980s, US transitioned from practicing new money approach—continued financing for existing projects—to haircut approach—increasingly writing off debts. Around same time, started more acceptive forgiveness. Yet policy banks, main financiers overseas projects, have been primarily practising commercially oriented, approach. rise therefore revitalized an private banks once commonly practised weakened regime took shape post-1980s decades.