As the Trump administration seeks ways to penalize China for its handling of the COVID-19 pandemic, it need look no further than Tennessee.
The Lewisburg, Tennessee-based American Bondholder Foundation holds $1.6 trillion of century-old Chinese debt, including interest, dating to before the founding of the communist People’s Republic of China, that it wants the administration’s help in redeeming. There is an estimated $6 trillion or more of the debt outstanding worldwide.
The bonds were issued by the Republic of China — which ousted the imperial government in a coup — as far back as 1912 and backed by gold; they were defaulted on in 1938. The ROC government fled to Taiwan, where it remains the official ruling body, after Mao Zedong’s communist party took over following the 1949 end of the revolution.
Beijing maintains Taiwan is part of China, and under international law, successor governments are responsible for the debts of their predecessors.