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US Calls for Payment on Qing Dynasty Bonds Worth $1.6tn

(ATF) Chinese state media outlet Ce.cn has responded to bizarre demands for unpaid interest on 1911 railway bonds bought from China by the US Treasury over a century ago. 

In October 1911, a group of revolutionaries in southern China led a successful revolt against the Qing Dynasty, establishing in its place the Republic of China and ending the imperial system. It is understood that the Qing Dynasty issued the bonds.

In response to calls on Fox News for this age-old debt to be repaid, the Chinese website said: “There is a wave of politicians in the United States who believe that Americans hold a batch of old Chinese bonds issued over a hundred years ago, always thinking about ‘cashing in’. According to a report by Fox News on the 13th [of August], on the same day, many members of the US Congress proposed a resolution requiring China to repay a group of US ‘bondholders’ a total of US$1.6 trillion in ‘sovereign debt’.”

According to Fox News, the resolution was co-sponsored by Arizona Senator Martha McSally, Tennessee Senator Marsha Blackburn and Tennessee Congressman Mark Green.

McSally claimed that “China has repeatedly failed to fulfil its obligations to the United States and robbed American families of money and work.”

“We must make China responsible for our debts and for the spread of the new coronavirus worldwide. We demand that China repay the $1.6 trillion owed to American families.”

Fox News said the above-mentioned resolutions only represented the wishes of relevant lawmakers and were not as yet legally effective.

Earlier media reports stated that in August last year a farmer in Tennessee, in the US, and others made similar requests. They held bonds issued by the Qing government in 1911 for the construction of the “Huguang Railway”, and in 1913 “Golden financing bonds” issued by the government of the Republic of China. 

The US bondholders insist that these bonds are worth hundreds of billions of dollars.

In May of this year, when someone in the United States clamoured that China would repay US$1.6 trillion in debt, Fox News quoted Cornell University associate dean and law professor Odette Lienau as saying that this should be done. But Leinau said the case was hard: “This lawsuit is very difficult to file because it is very old and it will be very difficult to practice. You must be legally creative.”

According to previous media reports, in fact, the US government and US courts have successively made rulings not to recognise these bonds since the 1980s. 

Among them, an article by the “Law Experimental Practice Teaching Center” at Renmin University of China stated that in the 1980s, the Chinese government hired a lawyer in the United States to win a case involving the “Huguang Railway Bond” in court.

The reason it won the case was the “Foreign Immunity Act” cited by people who demanded the Chinese government “repay the debt” was only passed in 1976 and has no retrospective effect on the 1911 bonds.

Chris Gill

With over 30 years reporting on China, Gill offers a daily digest of what is happening in the PRC.


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