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https://www.newsnationnow.com/us-new...rce-repayment/

Every country should pay its sovereign debt. Default, we are told, is not an option.

But has anyone told China?

The United States pays interest on approximately $850 billion in debt held by the People’s Republic of China. China, however, is currently in default on its sovereign debt held by American bondholders.

Successive U.S. administrations have chosen to sidestep this fact, allowing business and trade with China to proceed as normal. Now that the relationship with China has soured and the People’s Republic of China has become the greatest adversarial threat to the U.S. and Western security, policymakers should revisit this appalling failure of justice.

Some history is in order. Before 1949, the government of the Republic of China (ROC) issued a large volume of long-term sovereign gold-denominated bonds, secured by Chinese tax revenues, to private investors and governments for the construction of infrastructure and financing of governmental activities. Put simply, the China we know today would not have been possible absent these bond offerings.

In 1938, during its conflict with Japan, the ROC defaulted on its sovereign debt. After the military victory of the communists, the ROC government fled to Taiwan. The People’s Republic of China was eventually recognized internationally as the successor government of China. Under well-established international law, the “successor government” doctrine holds that the current government of China, led by the Chinese Communist Party, is responsible for repayment of the defaulted bonds. The Biden administration and the U.S. Congress have a unique opportunity to enforce the well-established international rule that governments must honor their debts. Like the UK did in 1987, the U.S. must view the repayment of China’s sovereign debt as essential to its national security interests. In doing so, the U.S. government should undertake one or both of two actions currently being discussed by members of Congress.

The first would be to acquire the Chinese bonds held by the ABF and utilize them to offset (partially or in whole) the $850+ billion of U.S. Treasuries owned by China (reducing up to $95 million in daily interest paid to China). This would lower the national debt and put the U.S. in a better financial position globally.

BOTTOM LINE China wouldn;t dream of letting anyone else default on the debt owed to Beijing as is the current situation with the 'loans' owed under its Road and Belt by several bankrupt Third World nations. Time to turn the fiduciary tables on Asia's biggest 'paper dragon"!!?? Twixt our trillion dollar debt and the third world defaulters, China is in a $erious jam it can't get out of...
I'd rather wage fiduciary-sinews warfare on the enemy's checkbook than the shootingwar's battlefield! https://foreignpolicy.com/2023/02/21...e-development/

In the span of a decade, China has emerged as the developing world’s bank of choice, pouring hundreds of billions of dollars in loans into global infrastructure projects as part of its sprawling Belt and Road Initiative (BRI).

But as its borrowers fail to pay up, China is finding that its newfound authority is coming at a price. Eager to recoup its money, Beijing is transitioning from generous investor to tough enforcer—and jeopardizing the very goodwill that it tried to build with initiatives such as the BRI. China has broken a few bones in Sri Lanka, whose financial turmoil allowed Beijing to seize control of a strategic port, and is hassling Pakistan, Zambia, and Suriname for repayment.

For two decades, countries “were getting to know China as the kind of benevolent financier of big-ticket infrastructure,” said Bradley Parks, the executive director of the AidData research group at William & Mary. Now, he said, “the developing world is getting to know China in a very new role—and that new role is as the world’s largest official debt collector.”