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Saturday, October 11, 2008

China Stiffing the U.S. for $1 MILLION

"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 situation is crystal clear," said another. "China has an obligation and if it wishes to operate globally it must meet this and any other obligations."

"If it walks like a duck, quacks like a duck, looks like a duck. China's credibility should be disclosed so investors are aware of the risk. China needs to pay its debts," added another.
Gallegly's effort also was to encourage that knowledge among investors.

"This action will put all investors on notice that China has refused to honor its obligations in contravention of international law," he wrote. "It will also encourage China to negotiate in good faith with American bondholders to settle their claims on defaulted bonds."
O'Brien called China's actions "selective default."

He said that's "a practice whereby a government selectively defaults on one specific class of full faith and credit soverereign obligations … yet honors repayment to selected creditors of a separate class.."

"China's refusal to honor repayment of its full faith and credit sovereign debt to American bondholders is best characterized by a statement that appeared in a recent news article: 'When it comes to territory, China claims Tibet and Taiwan based on historical claims predating the current communist government assuming power, but when it comes to debts owed to American citizens, it's a different story," he wrote.


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