China defaults on $1 trillion debt to US bondholders. Will Biden demand repayment?

All Countries Must Pay Their Share

When it comes to debts, it is crucial for all countries to fulfill their obligations. However, there seems to be an exception to this rule in the case of China.

According to The Hill, the United States currently owes China a staggering $850 billion and is making interest payments on this substantial amount.

Surprisingly, China itself is in debt to bondholders in the United States and has defaulted on this debt. Nevertheless, China continues to engage in trade with the U.S. as if nothing has happened.

Will President Biden Demand Repayment?

1—China is in default on a trillion $$ in debt 2 US bondholders. Will the US force repayment?—The Hill#WakeUpCongress
Every country should pay its #sovereigndebt .Default, we are told, is not an option.
But has anyone told #CCPChina ??
The United States… https://t.co/aJsbvLjueu

— Dan DiMicco (@DanRDimicco) July 5, 2023

In the past, U.S. administrations have turned a blind eye to China’s debts, allowing trade and business to continue without consequences. However, the situation has changed. As noted by The Hill, the relationship between the U.S. and China has soured, and China has emerged as the greatest adversarial threat to U.S. and Western security.

Today, China stands as one of the world’s largest economies, exerting influence over American companies such as AMC, General Motors, Spotify, and Snapchat.

According to The Hill, China’s economic power stems from the issuance of long-term sovereign gold bonds by the Chinese government before 1949. These bonds were secured by Chinese investors to finance infrastructure and governmental activities.

In 1938, during the Second Sino-Japanese war, China was divided into three factions: Nationalist China, Communist China, and Japanese-occupied areas. Eventually, the Communists defeated the Nationalists, establishing the People’s Republic of China as the country’s official government.

Under international law, the current Chinese Communist Party, as the successor government, is responsible for paying the defaulted bonds.

In 1987, former U.K. Prime Minister Margaret Thatcher negotiated an agreement with China, compelling them to pay their sovereign debt held by the British.

Will President Joe Biden follow in Margaret Thatcher’s footsteps?

Until now, China has accessed U.S. capital markets while disregarding its sovereign debt to American bondholders.

Other countries have fulfilled their debt obligations. Germany made its final reparations payment for World War I in 2010, and Great Britain made payments on bonds dating back to the 18th century in 2015. So why should China be treated differently?

The Biden administration has a unique opportunity to enforce the international rule that governments must honor their debts.

Just as the U.K. did in 1987, the U.S. must consider the repayment of China’s sovereign debt as crucial to its national security interests.

The post China Defaults on Trillion Debt to US Bondholders, But Will Biden Demand Pay Up? appeared first on The Western Journal.

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