Bloomberg: US “excavates” trillions of dollars of debt from the emperor – China refuses to pay, saying “irrelevant”

According to Bloomberg, the Trump administration is currently researching to use Chinese bonds bought by some Americans before the establishment of the People’s Republic of China.

It is known that the bonds with more than 100 years old are stored in the attic, basement of thousands of Americans, and even sold on EBay electronic market for collecting purposes for several hundred dollars. . However, the Chinese government does not recognize the government’s debt before the founding of the state and refuses to pay.

Currently, amid Mr. Trump’s more vocal criticism of China over trade issues, bondholders hope the president will take historical debt seriously.

Bloomberg pointed out that the US-held bond is a Hubei railway bond, sold in 1911 to support the construction of a train route from Hankou to Sichuan.

The US mentioned money invested in China in the early 20th century and called it “diplomatic money” – a way of building relationships with other countries by helping it industrialize. The Chinese, meanwhile, call it “the century of disgrace,” when the country is forced to accept investments and be unfairly controlled by foreign countries.

The bonds sold since 1911 are becoming a new option for the US to use in war. Photo: Bloomberg

After the last emperor of China was forced to abdicate in 1911, the government began to seek investment from the international financial market. These are bonds that the US side believes can be used as political leverage in the current US-China trade war.

“The People’s Republic of China denied its debts before 1949. But in doing so, the Chinese government went against its claim that it inherited all its own legal rights. prior rights, “ the US representative stated.

Besides, some experts assert that the total value of China’s bond debt is up to US $ 1,000 billion – this is the adjusted figure based on inflation, interest rates and compensation. This amount is almost equivalent to the value of US bonds that China is holding.

China’s denial of the legality of Chinese bonds has become a contentious topic.

Most experts agree that the legal system, the successive government, is responsible for the debts of the previous administration. Most governments in the later period chose this option because they did not want the previous investors to suffer.

Mitu Gulati, a law professor at Duke University and an expert on national debt restructuring, said: “Legally, these are completely valid debts. New talent engineers can make China acknowledge. “

Bloomberg said that this is not the first time bond debt has been discussed. Some American lawyers brought the issue of railway bonds to court in 1979 but did not “win” on the Chinese side.

Currently, the US Securities and Exchange Commission is reviewing the debt.

In the latest developments, China decided to impose tariffs on 5,078 US products worth US $ 75 billion with tariffs ranging from 5% -10%, taking effect in two periods from 1 January. 9 and December 15.

Meanwhile, US President Donald Trump announced that starting October 1, the US will raise the current tax rate from 25% to 30% on 250 billion USD of Chinese goods. The tax on the remaining US $ 300 billion of goods will be increased from 10% to 15% from September 1 and the tariffs for some items will take effect on December 15.