Case Study 5.1 Sovereign Debt Restructuring in Zambia: A Chinese Approach

China, as one of the world’s largest creditors, has recently faced numerous defaults on its loans by recipient states, bringing the issue of Chinese debt restructuring to the forefront. This case study unpacks this process, with a particular focus on Zambia, a country emblematic of the broader dynamics at play. The primary aim is to elucidate the mechanisms and negotiations employed by China, a major global creditor, in debt restructuring agreements with low-income countries, with an emphasis on its engagements in Africa. The case study starts with an analysis of the Zambia case, highlighting the negotiation tactics and terms of agreements between Zambia and China. This serves not only as a snapshot of China’s dealings with a specific country but also as a springboard for broader discussions. Subsequently, the case study broadens its scope to encompass China’s lending dynamics in the African continent. Furthermore, the case study establishes a global context by acknowledging China as the world’s largest official creditor. It critically questions China’s choice to remain outside the Paris Club and considers China’s inclination or aversion toward coordinated debt restructuring.