Financial Times | Wed, Oct 28, 2020
by Dambisa Moyo
A critical issue policymakers need to address urgently is the amount of debt plaguing the UK, the US and the global economy, and the impact the growing status of China as creditor to both the west and the developing world will have on that.
The IMF and World Bank have urged economies to access financial markets to borrow high during the pandemic. Kristalina Georgieva, head of the IMF, has said, “Only one thing matters — to be able to dare”. But the debt picture is precarious. The global debt to gross domestic product ratio is unsustainable, at over 320 per cent. Perhaps more worrying is that China’s role as a creditor now means debt concerns are not just economic, but also geopolitical. China is one of the top lenders to the US — which gives the country’s political class enormous leverage — and also now the largest lender to emerging economies.