Financial TimesFinancial Times

How China changed the game for countries in default

By Robin Wigglesworth and Sun Yu

13 Apr 2023 · 9 min read

Editor's Note

The fragile process for dealing with insolvent economies is now at risk of unravelling, according to the FT. The biggest threat stems from China's refusal to play by western-established rules.

In October 2020, Zambia, struggling from an economic and financial crisis compounded by the Covid-19 pandemic, first missed an interest payment on its international bonds. Two and a half years later it remains in limbo, unable to resolve the default on most of its $31.6bn debts.

That an impoverished and vulnerable country has for so long unsuccessfully laboured to reach a deal with creditors and move on from the crisis is an illustration of the messy process to deal with government bankruptcies, which some experts fear has now broken down completely.

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