LIKE many Americans, Jonna Bianco believes President Donald Trump to be “a tireless defender of the American people against Chinese economic aggression”. Ms Bianco, a Tennessee cattle-rancher, is president of the American Bondholders Foundation (ABF), which represents more than 20,000 owners of bonds issued by Chinese governments before the Communist revolution in 1949—and which claims that American citizens are owed more than $ 750bn. Having met Mr Trump at his golf resort in New Jersey last month, Ms Bianco hopes he will press their case.
The ABF’s claim is built on the widely accepted doctrine that governments inherit their predecessors’ debts. Pre-Communist Chinese governments flooded international markets with debt, such as a £25m (then $ 122m) issue of “gold loan” bonds in 1913. “As a legal matter, those debts still exist,” notes Mitu Gulati of Duke University. “But so too does the statute of limitations.”
Sovereign debtors are…
