LSE professor: Advanced economies, developing countries consider debt issues differently

Advanced economies and developing countries, especially those led by China, think about debt issues differently, said Keyu Jin, a professor at the London School of Economics and Political Science of the United Kingdom during a session about global debt at the 14th Annual Meeting of the New Champions, also known as the Summer Davos Forum, on Wednesday.

China thinks about emerging market borrowing as long term developmental issues, so they are very not inclined to do downright defaults, while the mindset of an advanced economy is more focused on short-term financial cycles, she said.

That's why international coordination requires Paris Club, China, the G20 and the common framework to come out to deal with emerging market issues, Jin said.

"They're facing tensions not because both sides do not want to help out or resolve these issues, but because they see these things in different terms," the professor said.