III 

110TH CONGRESS 

2D SESSION S. CON. RES. 78 

Expressing the sense of Congress that the People’s Republic of China and 

all enterprises owned or controlled by the People’s Republic of China 

should make proper disclosures with the Securities and Exchange Commission regarding the selective default status of certain bonds. 

IN THE SENATE OF THE UNITED STATES 

APRIL 28, 2008 

Mr. INHOFE submitted the following concurrent resolution; which was referred 

to the Committee on Foreign Relations 

CONCURRENT RESOLUTION 

Expressing the sense of Congress that the People’s Republic 

of China and all enterprises owned or controlled by the 

People’s Republic of China should make proper disclosures with the Securities and Exchange Commission regarding the selective default status of certain bonds. 

Whereas sovereign debt obligations (in this resolution referred to as ‘‘bonds’’) of the Government of the People’s 

Republic of China were offered and sold in the United 

States capital markets; 

Whereas the bonds constitute full faith and credit sovereign 

obligations of the internationally recognized Government 

of the People’s Republic of China; 


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•SCON 78 IS 

Whereas the People’s Republic of China subsequently defaulted on the bonds; 

Whereas the United States Foreign Claims Settlement Commission determined that the bonds constitute an unpaid 

general obligation of the Government of the People’s Republic of China; 

Whereas under the successor government doctrine of settled 

international law (establishing the continuity of obligations among successor governments), the repayment obligation for the bonds is the obligation of the Government 

of the People’s Republic of China; 

Whereas the Government of the People’s Republic of China 

has been duly notified by representatives of the affiliated 

United States creditors of the demand for repayment of 

the bonds; 

Whereas the Government of the People’s Republic of China 

continues to refuse to repay the bonds held by United 

States citizens and has officially repudiated the debts; a 

clear violation of United States law, international law, 

rules and regulations of the World Bank and the International Monetary Fund, and the United Nations Charter; 

Whereas the Government of the People’s Republic of China 

honored repayment of the bonds held by British citizens 

while rejecting the claims of United States citizens; 

Whereas the Government of the People’s Republic of China, 

its state-owned enterprises, and other entities controlled 

by the People’s Republic of China continue to enjoy open 

and unfettered access to the United States capital markets, while the Government of the People’s Republic of 


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•SCON 78 IS 

China continues to reject the lawful claims of United 

States citizens; 

Whereas the sales of securities in the United States capital 

markets issued by Chinese entities, including the Government of the People’s Republic of China and its stateowned enterprises, fail to disclose both the existence of 

the defaulted debt of the Government of the People’s Republic of China and the continued evasion of repayment 

of the bonds, the discriminatory treatment of United 

States citizens, and the People’s Republic of China’s repudiation of official debt; 

Whereas the wrongful actions of the Government of the People’s Republic of China are improperly concealed by the 

continuing publication of artificial ‘‘investment grade’’ 

sovereign credit rating classifications assigned to the Chinese government by the 3 primary Nationally Recognized 

Statistical Rating Organizations (NRSROs) and this concealment fails to conform to the published definitions of 

those Organizations; 

Whereas the continued publication of artificial ‘‘investment 

grade’’ sovereign credit rating classifications assigned to 

the Government of the People’s Republic of China provides an incentive to the Chinese government to avoid a 

negotiated settlement with United States citizens regarding China’s default on its sovereign debt obligations; 

Whereas the lack of transparency concerning the selective default of the Government of the People’s Republic of 

China poses a material risk to the investing public and 

threatens the integrity of the United States capital markets; and 


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•SCON 78 IS 

Whereas to provide relief to United States bondholders, restore transparency, uphold the rule of law, and affirm the 

validity of public debt contracts: Now, therefore, be it 

1 Resolved by the Senate (the House of Representatives 

2 concurring), That it is the sense of Congress that the Peo3 ple’s Republic of China and its government-owned and 

4 controlled enterprises should be required to properly dis5 close material information concerning the selective default 

6 status of these bonds in all prospectuses and filings with 

7 the Securities and Exchange Commission. 

Æ 


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