The G20 reciprocal socialization for global coordination on sovereign debt and development: perspective of China

This paper takes advantage of the theoretical framework of “reciprocal socialization” first proposed by Terhalle to assess the role of the G20 in shaping the interactions between emerging and traditional creditors on coordination of sovereign debt treatment and development cooperation. It focuses on the case of China, arguing that the G20 has strengthened Chinese identity as a “responsible major country,” and fostered its learning from the OECD and the Paris Club on debt restructuring and development assistance norms even without formal membership. This paves the way for the G20 to launch the Debt Service Suspension Initiative (DSSI) and the Common Framework for debt treatment beyond the DSSI in 2020 in response to the pandemic, a milestone of formal coordination between China and the Paris Club. While China exhibits more flexibility in endorsing the rules of the Paris Club, it is also expected to argue for its legitimate interests in BRI lending and reinterprets these rules on debt sustainability and development finance more broadly.