China and Africa: A new narrative on debt sustainability and infrastructure financing

Abstract

Strategic and collective efforts are needed from both the creditors and borrowing countries facing the looming debt crisis, with a full understanding of what are good debts and what are bad debts depending on how they are used. The current narrative on debt sustainability often ignores the issue of what a government owns (assets) versus what a government owes (liabilities). While conventional approaches largely focus on the liability side, the kinds of assets a country tries to build are vital to economic development and debt sustainability. This paper proposed a new narrative on debt sustainability and thoughts on infrastructure financing under the circumstance of debt restructuring. The empirical part of the study presented both the conventional and a novel method to investigate the role of completed infrastructure projects, co-financed and jointly built by China and African countries, focusing on whether and to what extent they have addressed infrastructure bottlenecks. Both methods validate the hypothesis that China-financed and completed projects match the host country’s most backward sectors and address their development bottlenecks. These completed projects form a part of a country’s public operational assets that generate essential social services, jobs, government revenues, exports and growth.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 3 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.