China is upending how the international financial system handles debt crises in the developing world. Wall Street isn’t happy.

Large bond fund managers cried foul last month when China blocked their deal to salvage investments in defaulted Zambian debt. The smackdown came just weeks after Chinese officials brokered a private debt restructuring with Sri Lanka, outmaneuvering Western governments that were trying to do the same.

Debt restructurings have historically followed a pattern. Countries in default typically asked the IMF how much debt reduction was needed to fix their economies, then haggled with lenders for the concessions.

China, in contrast, mostly negotiated on its own with debtor countries. It differed in other ways, too. China offered debt extensions to borrowers, but not debt reductions that the Paris Club and bondholders sometimes agreed to. It also resumed lending faster after default than Western countries.

Sri Lanka borrowed billions from China in the 2010s to build projects before the government defaulted and collapsed last year. The IMF has agreed to provide a $3 billion bailout as long as other lenders agreed to debt relief.

The day before the planned announcement, Sri Lanka revealed that China had already negotiated its own restructuring of $4 billion of debt, without revealing the terms. The official committee canceled its scheduled announcement and sought to find out whether the Chinese deal was comparable to what Japan, India and their cohort had agreed to, the people familiar said.

Six days after Beijing’s announcement, the Sri Lankan government made another unexpected disclosure: two state-owned Chinese companies were investing $1.6 billion to help jump-start construction at the Port City Colombo, a project whose progress had stalled since the country defaulted.

“What the Chinese are offering is exactly what the Sri Lankan authorities want: new money and investment," said Brad Parks, the executive director of William & Mary’s AidData research lab. “It might not be in the interest of the country in the long run, but in the short run, it’s almost too good to pass up on."