Senate and House members join to claim a $1.6 trillion debt from the Chinese Communist Party (CCP) outstanding since 1912.
Under international law, the CCP would be excluded from the international market until it pays this debt, according to Fox News on Aug. 19. The debt is not time-barred, and successive governments have an obligation to pay it.
A similar debt was paid by former Chinese leader Li Xiannian, who agreed with British Prime Minister Margaret Thatcher to pay about $31 million in 1987.
By paying some bondholders and not others, the CCP is selectively defaulting on debt, according to Moody’s, Standard & Poors and Fitch, companies specializing in bond risk.
“We can no longer stand by and allow China to default on its obligations to our nation under international law,” said Rep. Mark Green (R-Tenn.), who introduced a resolution in the House calling for payment.
A few days earlier, Sen. Martha McSally (R-Ariz.), supported by Sen. Marsha Blackburn (R-Tenn.), had introduced a similar resolution in the Senate.
The debt incurred by the Chinese government at that time affected 20,000 American families in 46 states.
“That’s what the American people expect. That’s what they want,” said the president of the American Bondholder Foundation, Jonna Bianco, who has power of attorney from 95 percent of the bondholders.
“Between 1900 and 1940, China issued millions of dollars in sovereign debt to the United States, and then defaulted,” Green said, according to Fox News.
This delay in the payment of the CCP’s obligation contrasts with the payment of $72 million a day by the United States for the interest on its debt to the CCP.
Although the resolutions presented by the congressmen do not have the force of law, they provide President Donald Trump with more instruments of pressure on Beijing.