Gallagher in FT on China’s Overseas Development
Kevin Gallagher, Professor of Global Development Policy and Director of the Global Development Policy Center at the Frederick S. Pardee School of Global Studies at Boston University, wrote a recent letter to the editor of Financial Times on risk and reward in China’s overseas development plan.
Gallagher’s letter, entitled “Risk and Reward in China’s Overseas Development Plan,” was published on March 7, 2018.
From the text of the letter:
Your editorial comment (“ China needs to act as a responsible creditor ”, April 30) is quite hypocritical in the broader context. China is criticised for its potential of stretching the limits of debt sustainability across the world for its ambitious Belt and Road Initiative that promises to interconnect Asia with modern infrastructure and regional integration.
It is hypocritical to shun China for the debt potential of a programme that is just getting going given that the unsustainable debt levels in emerging market and developing countries are largely due to the overly loose monetary policy that the United States has exported to the world since the global financial crisis.
China’s financing promises to be much more productive than the short-term capital flows that surged into the EM and developing countries and is now trickling away as US interest rates rise and growth prospects plateau in the emerging world—leaving behind piles of dollar-denominated debt in the corporate and some public sectors.
Gallagher served on the U.S. Department of State’s Investment Subcommittee of the Advisory Committee on International Economic Policy and the International Investment Division of the United Nations Conference on Trade and Development. He has served as a visiting or adjunct professor at the Paul Nitze School for Advanced International Studies at Johns Hopkins University, the Fletcher School of Law and Diplomacy, Tufts University; El Colegio de Mexico in Mexico; Tsinghua University in China; and the Center for State and Society in Argentina. You can follow him on Twitter @KevinPGallagher.