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MONEYNETDAILY
China stiffing America for $100 billion in debt
Yet U.S. taxpayers helping Beijing as part of trillion-$ credit bailout
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Posted: October 10, 2008
10:15 pm Eastern
By Bob Unruh
© 2008 WorldNetDaily
While Chinese companies are in line to benefit directly from U.S. taxpayers' $700 billion-plus bailout of Wall Street, Fannie Mae, Freddie Mac and other financial institutions, Beijing is stiffing the U.S. for $100 billion or more in unpaid debt.
The status of the Chinese economy, including its repudiated debt, has prompted one analyst to warn of an "ominous threat" involving China's finances and suggest the possibility of "a dramatic reversal" for the "so-called Chinese Miracle."
"One of the greatest problems facing China is the government's failure to acknowledge and effectively address the true extent of state institutions' bad debt," Kevin O'Brien writes in an article titled, "Reassessing China's Sovereign Risk: Emerging Global and Domestic Trends Threaten the 'Chinese Miracle."
O'Brien's report was published at a website for the Global Association of Risk Professionals, a not-for-profit independent trade association of risk management practitioners around the world. It has 77,000 members from fields such as banking, investment management and academics.
One problem that should be addressed, he writes, is the $260 billion in sovereign debt owed U.S. and other investors which China has said it simply won't repay.
"The repayment obligation was inherited by the People's Republic of China, when the communists took control in 1949. The successor government doctrine of settled international law affirms continuity of obligations among international recognized successive governments," O'Brien said.
The PRC is the internationally recognized successor government … which contracted the credit sovereign debt … and which had a loan agreement that states that such debt is intended to be 'a binding engagement upon the Republic of China and its successors.'"
The bonds, however, were excluded from a 1979 settlement of Chinese debts and in 1987, China even "concluded a discriminatory settlement accord with bondholders in Great Britain – an agreement that excluded from settlement any bonds held by non-UK citizens."
Then in 2006, the Chinese Ministry of Finance issued an official communiqué addressed to "the Embassy of the United States of America in China," in which the Chinese government formally repudiated China's defaulted full faith and credit sovereign debt and announced that it would not repay any debt held by American citizens, O'Brien said.
The repudiation still stands, even though the China Economic Review confirmed that major Chinese banks own $8 billion in Fannie Mae and Freddie Mac securities that are the targets of bailout provisions.
MONEYNETDAILY
China stiffing America for $100 billion in debt
Yet U.S. taxpayers helping Beijing as part of trillion-$ credit bailout
--------------------------------------------------------------------------------
Posted: October 10, 2008
10:15 pm Eastern
By Bob Unruh
© 2008 WorldNetDaily
While Chinese companies are in line to benefit directly from U.S. taxpayers' $700 billion-plus bailout of Wall Street, Fannie Mae, Freddie Mac and other financial institutions, Beijing is stiffing the U.S. for $100 billion or more in unpaid debt.
The status of the Chinese economy, including its repudiated debt, has prompted one analyst to warn of an "ominous threat" involving China's finances and suggest the possibility of "a dramatic reversal" for the "so-called Chinese Miracle."
"One of the greatest problems facing China is the government's failure to acknowledge and effectively address the true extent of state institutions' bad debt," Kevin O'Brien writes in an article titled, "Reassessing China's Sovereign Risk: Emerging Global and Domestic Trends Threaten the 'Chinese Miracle."
O'Brien's report was published at a website for the Global Association of Risk Professionals, a not-for-profit independent trade association of risk management practitioners around the world. It has 77,000 members from fields such as banking, investment management and academics.
One problem that should be addressed, he writes, is the $260 billion in sovereign debt owed U.S. and other investors which China has said it simply won't repay.
"The repayment obligation was inherited by the People's Republic of China, when the communists took control in 1949. The successor government doctrine of settled international law affirms continuity of obligations among international recognized successive governments," O'Brien said.
The PRC is the internationally recognized successor government … which contracted the credit sovereign debt … and which had a loan agreement that states that such debt is intended to be 'a binding engagement upon the Republic of China and its successors.'"
The bonds, however, were excluded from a 1979 settlement of Chinese debts and in 1987, China even "concluded a discriminatory settlement accord with bondholders in Great Britain – an agreement that excluded from settlement any bonds held by non-UK citizens."
Then in 2006, the Chinese Ministry of Finance issued an official communiqué addressed to "the Embassy of the United States of America in China," in which the Chinese government formally repudiated China's defaulted full faith and credit sovereign debt and announced that it would not repay any debt held by American citizens, O'Brien said.
The repudiation still stands, even though the China Economic Review confirmed that major Chinese banks own $8 billion in Fannie Mae and Freddie Mac securities that are the targets of bailout provisions.
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