The sums required to meet global challenges like mitigating climate change and strengthening financial-market stability far exceed available public funding. Attracting voluntary private investment, however, will require the development of a menu of innovative financial instruments.

We are entering a period of deteriorating US-China relations, with each side backed by its own allies and operating in its own international forums. While the precise impact of the changing geopolitical balance remains unknown, it is clearly becoming an impediment to addressing humanity’s most pressing problems.

Beijing needs to let unsalvageable developers fail and, crucially, avoid saddling banks with bad loans. Short-term pain is preferable to infecting finance and creating a deeper, longer economic downturn.