Cover Story: China Joins Effort to Avert Sovereign Debt Crisis

As China has emerged as the largest creditor to developing countries it is taking on a new role with global lenders helping sovereign borrowers restructure repayments amid the worst debt crisis for poor countries since the 1980s.

Since 2020, a new wave of international sovereign debt default risks has surfaced, exacerbated by the Covid-19 pandemic. According to the World Bank, more than 70 low-income nations were collectively managing $326 billion in debt as of the end of 2021. More than half of them are in or near debt distress, including Zambia, Ethiopia, and Ghana.