Sovereign debt restructuring: the potential role of China in the Belt and Road Initiative in the post COVID-19 era.

Mak, Charles Ho Wang

Abstract

Sovereign bonds have become a major asset category in recent decades. Due to the fallout of the 2007-2009 financial crisis and the accompanying sovereign debt crisis, the interconnected nature of sovereign debt management, financial stability and systemic risk has been brought into sharp focus. Due to heightened financial fragility, the additional pressure of the COVID-19 pandemic has set the stage for a debt crisis and potentially a serious economic catastrophe. Therefore, an efficient system of sovereign debt restructuring (SDR) is becoming increasingly important for international financial stability. China has received a wave of requests for debt relief from crisis-stricken nations participating in the "Belt and Road Initiative" (BRI), the world's largest economic initiative, due to higher government expenditure and reduced tax collection in the wake of the COVID-19 epidemic. There are no uniform guidelines that address SDR and default among BRI nations. Instead, SDR is currently operating on an ad hoc basis.

Citation

MAK, C.H.W. 2022. Sovereign debt restructuring: the potential role of China in the Belt and Road Initiative in the post COVID-19 era. China, law and development research briefs [online], 2022(9). Available from: https://cld.web.ox.ac.uk/files/finalrbmakpdf

• Working Paper Type: Working Paper
• Deposit Date: Jul 20, 2023
• Publicly Available Date: Jul 21, 2023
• Series Title: China, law and development research briefs
• Series Number: 2022(9)
• Keywords: Sovereign debt; National debt; Debt restructuring; China; Belt and Road Initiative (BRI)
• Public URL: https://rgu-repository.worktribe.com/output/2015385
• Publisher URL: https://cld.web.ox.ac.uk/files/finalrbmakpdf