The Chinese Communist Party has been screwing the US with constant hacking,
intellectual property theft, and manipulating financial markets. But
China has one major weakness, that is so…easy…to exploit.
Welcome to China Uncensored, I’m Chris Chappell.
There’s a way we can bankrupt China. And Taiwan is the key.
The Chinese Communist Party claims to be the
one true legitimate government of Mainland China and Taiwan.
But that claim also opens up China to a devastating attack from the United States.
A quick bit of history to set things up.
In 1949, the Chinese civil war ended.
It saw Mao’s Communist guerrilla forces seize control of Mainland China
from the previous government, Chiang Kai-Shek’s Republic of China. After
his defeat, Chiang and his government fled to Taiwan.
And despite Mao trying to invade twice
The status quo remains to this day.
And this gives the US a tremendously powerful weapon to use against the Chinese Communist
Party. That weapon is debt. I’ll tell you more after this quick commercial break.
Welcome back.
Did you know the US is $850 billion in debt to Communist China?
Every year, the US pays interest on that to our greatest enemy.
The one building up its Navy and creating anti-Aircraft carrier missiles.
The one pumping Fentanyl into the US
The one that sends spy balloons across the entire country.
Now the US has to pay that debt. It's called sovereign debt. If a country can’t make good
on its debt, it goes into default and that kind of blows up the country’s economy.
But here’s the thing—China, right now,
is currently in default on its sovereign debt to the US. And that gives the US tremendous leverage.
How did this happen?
When Chiang’s Kai-Shek’s Republic of China was in charge,
it issued a bunch of long-term sovereign gold-denominated bonds to build up China.
The China we know today would not be possible without it.
And plenty of American investors bought those bonds.
That put the Republic of China in debt to America.
But when Japan invaded China in 1938, the Republic of China defaulted on those debts.
Today those debts are valued at $1 trillion.
And here’s the thing—
“Under well-established international law, the “successor government” doctrine holds
that the current government of China, led by the Chinese Communist Party,
is responsible for repayment of the defaulted bonds.”
In other words, the CCP owes America $1 trillion dollars. The CCP is the legitimate government of
China, right? Then it's responsible for the debt of the old Republic of China.
This is well established. It doesn’t matter how old those bonds are,
or that its from a previous government of China.
In 2010, Germany made its last payment for reparations from World War 1.
In 2015, Great Britain paid off bonds from the 18th century.
So yeah, China is responsible for that debt and it owes big. Again, $1 trillion dollars.
And here’s the thing, the CCP has already made good on that old debt to the UK.
When Prime Minister Margaret Thatcher was negotiating the
handover of Hong Kong to China, she demanded that for that to go through,
and for China to have access to UK capital markets, the CCP had to honor those debts.
And they did.
The thing is, the US has yet to put the screws on the CCP for the debt it owes to America. China
has all the access it wants to American capital markets despite being in default on its debt.
That can change anytime.
And with the writing on the wall for US-China relations, now is the time.
Here’s what could happen.
The first thing is the US could take that $1 trillion dollars worth of
bonds and offset in part or in whole the $850 billion the US owes China.
That would remove “the $95 million in daily interest paid to China.”
We’d have a lower national debt, be better off financially as a country. Sounds great.
Congress could also pass a law requiring China to, you know, actually follow international law.
And if they don’t, China gets cut off from the US market.
China could not afford that. The CCP would have to kowtow to US demands.
Instead of our Treasury Secretary kowtowing to China.
And the great thing about the debt is it gives the US a powerful tool to fight the CCP that
isn’t using the military. The UK has already done it. It’s time for the US to as well.
And China Uncensored would not exist without the support from viewers like
you. Frequent demonetization and age restriction by YouTube would
have run us out of business. Most of our budget comes from fan support on
the crowd funding website Patreon. That’s patreon.com/chinauncensored.
If you support the show, with even as little as a dollar an episode, you’ll
get a bunch of cool perks, including the chance to have me answer your questions on the show.
Today’s question comes from Ian Pendleton. “What would happen if the U.S. government
somehow finally wised up to the CCP and stopped caring about trying to get
high-level meetings with its members? Would not getting them be a good thing in any way?”
That’s an excellent question.
When Biden came to power, he promised relentless diplomacy.
And while that sounds good, the CCP has actually manipulated the
desire for diplomacy for its own advantage.
China essentially cut off access. US military
officials still haven’t been able to talk to their Chinese counterparts in months.
And for other Biden Administration officials, they had to jump through hoops to get meetings.
The US delayed the release of its Covid investigation, so Secretary of State
Blinken could travel to China. You think the CCP didn’t make that part of the agreement?
And on the eve of Treasury Secretary Yellen’s trip to China,
Chinese hackers targeted top US officials.
The US should have called off Yellen’s meeting.
But they wanted the meeting so bad, they let it slide.
That tells the CCP they are the ones in the driver's seat.
And the US is willing to bow. Literally.
That’s why using the Sovereign Debt against China is so powerful. It puts the US back in the
driver's seat, gives the CCP real consequences for its actions. That’s how diplomacy actually works.
We need to make it so the CCP is begging for meetings with the US, not the other way around.
Thanks for your question and all your longtime support Ian.
And thank you for watching.
Check out patreon.com/chinauncensored for how you can support the show.
Once again I’m Chris Chappell. See you next time.