Systemic indebtedness and international law: new creditors, same legal form

Abstract Systemic indebtedness has become a defining feature of the contemporary global economy, trapping billions of people and their governments in cycles of poverty and underdevelopment while posing serious threats to economic stability, political governance, and human welfare worldwide. This article argues that international law persistently structures creditor–debtor relations in ways that entrench structural inequalities in the sovereign debt world. The emergence of China as the world’s largest official bilateral creditor has unsettled an already fragile legal landscape. Successive attempts to institutionalize sovereign debt restructuring have each foundered, revealing the extent to which these institutional efforts remain captured by creditor–state interests. Despite China’s distinct lending practices and development-oriented framing, Chinese sovereign lending reproduces the same legal form as traditional creditor–debtor relations—a form that extends formal equality to creditors and debtors as subjects of international law while concealing and entrenching the substantive inequalities that define the position of debtor states within the international financial system. It is the persistence of legal form, across shifting creditors and geopolitical configurations, that perpetuates systemic indebtedness and demands a fundamental rethinking of international law on sovereign debt from the perspective of debtor countries.