In 1913, a year after the last Manchu emperor left the throne, China issued bonds that were backed by revenues from government-owned salt mines. Now, a group of Americans is telling China it's time to pay up on those bonds they say are worth US$89 billion today.
"There's a clear obligation for China to pay under international law," says B. Riney Green, a Nashville, Tennessee, attorney who is representing the American Bondholders Foundation, a group of some 345 families from 24 states.
China, however, has long insisted it is not responsible for the debts incurred before Mao Tse-tung led the communists to power in 1949. Calls to the Chinese Embassy in Washington were not returned.
PHOTO: AP
The American group holds more than 18,000 Chinese government bonds issued between 1913 and 1942, the great majority from sales in 1913 of "gold loan" bonds payable in British pound sterling and three other European currencies.
Geri Santos of Apollo Beach, Florida, said she found the bond certificates in a black bag after her mother died.
"We didn't know what they were" until she read a newspaper article about others with the Chinese bonds, and she still does not know how much they are worth. ``But I think there's going to be a payoff.''
Foundation members were in Washington last week seeking to raise awareness of their issue. Getting the Bush administration to take on a new dispute with China could be difficult.
"We're very realistic about our expectations," Green said.
But the foundation president, Tennessee cattle rancher Jonna Bianco, said members are not without hope. In 1987, as part of its negotiations with Britain on the return of Hong Kong, China did agree to partially honor pre-1949 debts to British bondholders. Those debts included gold loan bonds.
Treasury Department figures show that as of January, China was the fourth-biggest foreign holder of US Treasury securities, with US$65.5 billion, and Bianco said it receives more than US$4 billion a year in interest from those investments.
One possibility would be to seize some of those interest payments to compensate the holders of defaulted bonds, although Green said: ``We're not trying to precipitate some kind of financial crisis with China. That would be a last resort.''
Bianco said that with China's recent accession to the WTO, Beijing must abide by international rules on business transactions. Her group plans to file a formal complaint with the WTO.
``Nobody's trying to be greedy,'' Bianco said. She said the claimants have agreed that, if they reach a settlement with China, they would donate 10 percent of the after-tax money to the US government and set aside an additional 30 percent for humanitarian and charitable organizations.
"The administration owes its citizens the obligation to at least discuss the issue," said US Representative Bart Gordon, a Tennessee Democrat.
Gordon wrote President George W. Bush in January saying that because bondholders cannot take China to court, they are dependent on executive-branch action for a fair resolution of their claims. He said he has not received a response. Bianco said the Chinese government generally has ignored her many inquiries. One letter from China asked if the US paid back its debts after gaining independence from Britain. She wrote back that it did.
Officials of the State Department and the Securities and Exchange Commission have suggested that the group go through the Foreign Bondholders Protective Council, a private, nonprofit organization created in the 1930s to help individual Americans collect on defaulted foreign government bonds.
John Petty, who was an assistant treasury secretary during the Johnson and Nixon administrations, now heads the council. He said it was active before World War II and then again in the 1970s and 1980s because of unpaid East European bonds, but has not done much in the last 15 years.
Petty said he is prepared to assist those holding the Chinese bonds but needs some indication the administration is interested. "Unless you have the administration supporting the resolution of the problem, any intermediary is basically pushing on a string, he said.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary