GOP senator calls on China to repay $1.6T of century-old debt | Fox Business
The bonds, which are backed by gold, were issued by the Republic of China as long ago as 1912. The government s leaders fled to Taiwan following the end of Chairman Mao Zedong s revolution in 1949. Beijing maintains Taiwan is part of China, and under international law, successor governments are responsible for the debts of their predecessors.
British Prime Minister Margaret Thatcher in 1987 ordered Beijing to pay Brits for their holdings or lose access to British capital markets, enticing then-Chinese President Li Xiannian s government to reach a settlement of 23.5 million British pounds.
By paying some bondholders and not others, Beijing is technically in selective default, according to the ratings of bond-risk firms Moody s, Standard & Poors and Fitch, and cannot access the international debt market until it pays the remaining holders.
Great story.