Minding the gap: China contesting norms for public debt management?

AbstractThis article addresses the questions of whether, to what extent, and how China contests the norms and practices for public debt management in developing countries as currently preferred by the Group of Seven (G7) and G7-led multilateral institutions. More specifically, it considers three norms: debt sustainability, debt transparency and conditional debt relief. To that end, I elaborate a norm contestation typology and apply it to analyse how China discursively contests these norms. Equally, I contrast China’s rhetoric with its actual behaviours. Two findings emerge from the analysis. First, there are notable efforts by China to contest the three norms, with Chinese officials emphasising a qualitatively distinct understanding of debt sustainability and debt transparency and the appropriateness of non-conditionality and equality in the provision of debt relief. Second, there is an apparent disjunction between China’s words and actions, with its actual lending and debt relief practices (becoming) more aligned with what is currently preferred or advocated by the established actors. Disclosure StatementNo potential conflict of interest was reported by the author(s).Notes1 This study focuses on the discursive dimension, though it draws on findings from studies on China’s actual behaviours to make an overall assessment.2 It should be noted that the analysis here approaches the three norms as relatively stable. This is not to say that they have not been subjected to contestation and change. What is shown reflects what remains robust despite contestation or what has emerged from contestation as a prevailing understanding.3 Debt relief comes in various forms: debt forgiveness or write-off (when part or all of a loan is cancelled), rescheduling (when a loan’s repayment time is extended but no reduction of net present value), restructuring (when loan terms such as interest rate, maturity, grace period are renegotiated, leading to a reduction of net present value), and refinancing (when a new loan is issued to pay off an old one).4 A note of caution is needed here. While China did make significant concessions, including dropping its demand on the inclusion in the debt restructuring of multilateral lending and foreign-held local currency bonds, it also had some of its key demands met, such as no debt write-downs.Additional informationFundingThis project received funding from the University of Macau [SRG2023-00045-FSS].Notes on contributorsHai YangHai Yang is an Assistant Professor at the Department of Government and Public Administration, University of Macau. His research centres around the role of language in international relations, with a focus on China’s contestation of multilateral institutions and established norms. His research output has appeared in Cambridge Review of International Affairs, International Studies Review, Global Policy, Global Governance, Journal of Contemporary China and Pacific Review among others.