Rep. Mark Green, R-Tenn., has introduced a resolution calling on China to repay more than $1.6 trillion, including interest, owed to U.S. holders of sovereign debt that predates the Communist Party’s government.
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The House resolution follows a similar measure introduced last week by Sen. Martha McSally, R-Ariz., and co-sponsored by Sen. Marsha Blackburn, R-Tenn. A resolution expresses the will of members of Congress without the force of law; action on the matter would have to be taken by the Trump administration.
"We can no longer stand by and allow China to default on its obligations to our nation under international law," said Green, who occupies Blackburn's old seat in the Hosue and was a nominee for Army Secretary earlier in Trump's term. "Enough is enough."
The resolutions in both chambers of Congress are "sending a message to the president, 'We support you, President Trump, in holding China accountable,'” said American Bondholder Foundation President Jonna Bianco, who has power of attorney for 95% of the thousands of U.S. bondholders. “That's what the American people expect. That's what they want."
The bonds, backed by gold, were issued by the Republic of China as early as 1912 before that government’s leaders fled to Taiwan at the end of Chairman Mao Zedong’s revolution in 1949.
Beijing has long maintained that Taiwan is part of China, and under international law, successor governments are responsible for the debts of their predecessors.
Former Chinese President Li Xiannian reached a settlement of 23.5 million British pounds with then-British Prime Minister Margaret Thatcher in 1987 after she demanded Beijing pay Brits for their holdings or be shut out from her country's capital markets.
By paying some bondholders and not others, Beijing is technically in selective default on its debt, according to the ratings of bond-risk firms Moody’s, Standard & Poors and Fitch. The Chinese Communist Party cannot access the international debt market until it pays the remaining holders.
Green's resolution comes less than a week after Trump canceled talks that were scheduled for this past Saturday to discuss the progress of a trade agreement with President Xi Jinping's government signed in January.
"I don't want to deal with them right now," Trump told reporters on Tuesday, blaming China for failing to contain COVID-19, which was first spotted in the city of Wuhan late last year and has since become a global pandemic.
The disease has infected and killed more people in the U.S. than any other nation, limiting the operations of some businesses and shuttering others as officials mandated lockdowns to curb its spread. As a result, the once-vibrant American economy has spun into the worst downturn since the Great Depression, undermining Trump's re-election campaign.
"What China did to the world was unthinkable," the president said. "They could have stopped it."
Green echoed Trump's position in his own remarks.
"China must be held accountable for its repeated lies and malign behavior," he said, "and for the unparalleled destruction it has caused by unleashing the coronavirus on our country and the world.”