China surpassed the World Bank and the IMF as the world's largest single creditor by lending heavily to developing countries through the BRI. Beijing hopes the borrowing countries would align themselves with Beijing's interests on geopolitical issues and the loans will generate good interest returns. However, debtor countries struggled to repay their debts to the Chinese and other creditors, and some countries were bankrupt.

Generally, debtor nations can seek help from the Paris Club for debt restructuring or relief. However, China refuses to be part of the coalition and often doubts the norms for international debt restructuring practices. China insisted that multilateral countries must share the burden of losses, despite it being the largest creditor, contradicting the traditional process of global debt restructuring. Although China has experience in bilateral debt rescheduling, it does not have experience working with other creditors, and different Chinese financial institutions hold the debts.

It makes debt renegotiation challenging even at the domestic level. Yet, domestic and economic pressures forced China to make a U-turn. China may stop asking multilateral lenders to take losses. In the 1980s, due to heavy debt burdens, Latin America lost decades of economic growth, and it also caused hyperinflation that drove people into poverty. China must work with the rest to stop the debt crises from exacerbating to prevent lending countries from an imminent demise.