How China changed the game for countries in default

Defaulting countries seeking restructuring must deal with not just the IMF and World Bank but also Chinese creditors, including the Export-Import Bank of China © FT montage/Bloomberg

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.