Abstract:

Under the dominance of the United States and other Western countries, the international practice of sovereign lending has long taken the form of conditional sovereign lending— loans tied to reform conditionality— which has operated as a key instrument for exporting Western institutional paradigms and embedding influence in the governance structures of debtor states. Grounded in the Law and Development Movement and neoliberalist theory, this model employs lending conditionality to compel institutional reforms in debtor states, thereby generating in practice a quasi-legal order with externally constraining effect. Long-standing experience, however, shows that conditional sovereign lending has not effectively strengthened debtor states’ debt-servicing capacity; to the contrary, it has deepened structural problems such as institutional dependency, governance weakening, and erosion of sovereignty. Debtor states’ right to development and policy autonomy are subject to structural constraints, and the injustice and imbalance of global debt governance have become increasingly salient. Therefore, it is necessary to build a new model of sovereign lending that is more inclusive and development-oriented. In this regard, China should, consistent with the principles of sovereign equality and developmental autonomy, promote a new paradigm of sovereign lending centered on capacity-building, using soft law as the principal modality and procedural justice as the safeguard; drawing on loan practices that do not attach political conditions, China can offer a more inclusive and sustainable proposal for the reconstruction of international law and contribute Chinese insights and institutional models to global financial governance.

Key words: sovereign lending, conditional sovereign lending, Law and Development Movement, global governance