Chinese netizens, scholars condemn US politician’s proposal to withhold debt payment
Published: Mar 12, 2021 09:13 PM
People walk past the US Treasury Department building in Washington, D.C., the United States, May 21, 2020. (Photo by Ting Shen/Xinhua)

People walk past the US Treasury Department building in Washington, D.C., the United States, May 21, 2020. (Photo by Ting Shen/Xinhua)

A recent proposal by a US politician to permanently withhold debt payments to China as a way of "punishing" it over COVID-19 triggered outrage on Chinese social media on Friday. Netizens and scholars condemned the proposal as no more than another shameless trick.

Republican Congressman Brian Mast is expected to introduce a measure to permanently withhold payments from the US and other countries on debt owed to China, as he thinks China has "left untold economic destruction" in the US amid the pandemic, Fox News reported on Thursday.

On China's Twitter-like Weibo, users mocked his ridiculous idea as a kind of gangster logic.

There is little possibility that the US will withhold its debt payments to China, as it could cause a "huge negative impact" on the international community's trust in the country, the dollar system and the US' current financial status in the world, said international finance scholar Xi Junyang, a professor at Shanghai University of Finance and Economics.

The US has never defaulted on its federal debts, apart from occasional freezing of debt payments to certain countries, Xi said. "The debt default won't happen unless extreme cases happen, such as a war between the US and China," he told the Global Times.

Mast's proposal is just an example of a US politician trying to get more exposure through groundlessly attacking China, said Yu Xiang, a senior research fellow at the Globalization Research Center under Tsinghua University. 

"They make such eye-catching and even anti-intellectual remarks only for their personal political ends," Yu said.

Similar ridiculous claims were also made by some US organizations and individuals in September 2020, when they asked China to pay back "$1.6-trillion" in century-old bonds issued by the government of the Qing Dynasty (1644-1911). 

The claims were rejected by Chinese netizens. One said that "following this logic, Western aggressors should firstly return to China the treasures they looted from the Qing government at that time."

It also showed a basic lack of knowledge of the law that the bond issuer has changed, Yu told the Global Times. "The government of the People's Republic of China is not a successor to the feudal Qing Dynasty government," he noted.

China, the world's second-largest holder of US debt, has been gradually trimming its holdings of US bonds in recent years. China owned $1.07 trillion of US debt by December 2020, some $50 billion less than that at the end of 2018, statistics showed.

The main way for China to avoid potential default risks is to reduce its holdings of US Treasury bonds, Xi said. China will continue trimming the holdings to about $800 billion within one or two years from the current level, he predicted.

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