The Gentlemen's Agreement

How China used credit to control the critical minerals market

“Credit has the ability to build a modern economy, but lack of credit has the ability to destroy it, swiftly and absolutely” Ben Bernanke

In the genteel halls of Paris in 1978, a group of Western finance ministers struck a historic handshake deal—an agreement without teeth but with plenty of table manners. It was called the OECD Arrangement on Officially Supported Export Credits, and it was born out of a singular goal: stop countries from bribing their way into foreign markets using sweetheart credit terms.

It was, in essence, a gentlemen’s agreement—a relic of postwar idealism when handshakes meant more than spreadsheets. The idea? Compete on merit, not money. Let the best goods win, not the best loans. Don’t race to the bottom on credit terms just to win contracts. Good intentions. Bad foresight.

The origin story isn’t just bureaucratic nostalgia—it’s a tale of Cold War anxiety, global inflation, and a race to out-subsidize each other in the name of exports. After World War II, Western nations scrambled to rebuild their economies and project influence through trade. Government-backed export credits—loans, guarantees, insurance—were supposed to help firms compete globally.

But by the 1970s, the system was spiraling. Countries were offering more generous, longer-term, lower-interest credit just to win contracts. It became an arms race of national treasuries. Exporters weren’t winning based on quality or innovation—they were winning based on how cheap their governments could make the financing.

Tensions soared. Deals were collapsing. Budgets strained. Trust eroded. The need for coordinated guardrails became undeniable.

So in 1978, 24 countries under the Organisation for Economic Co-operation and Development (OECD) hashed out what became the Arrangement on Guidelines for Officially Supported Export Credits. Not a treaty. Not legally binding. Just a handshake. A gentleman’s pact—the kind where you're only as good as your word.

The Arrangement laid down basic rules:

• Minimum interest rates

• Maximum repayment terms

• Standard grace periods

• Transparency of terms

• No overt subsidies masquerading as credit support

  

It was the financial equivalent of a disarmament pact—designed to level the playing field among export credit agencies (ECAs) and avoid a downward spiral in global trade terms.