the current government of China owes this money under accepted and recognized international law. That law holds that an “… established and widely recognized government of a nation is liable under international law for the full faith and credit obligations of the established and widely recognized predecessor government of the same nation.”
China has practically acknowledged and accepted responsibility for the debt. In the late 1980s it settled some of these bonds issued in Great Britain to regain access to British financial markets. In the late 1970s China settled American claims for property nationalized by it in 1949. Jonna Bianco at American Bondholders Foundation reports that China has insisted the current Iraqi government be responsible for Iraqi debt accrued under Saddam Hussein. Of course, the PRC had no problem with accepting Hong Kong’s transfer to it despite not existing when the lease was drafted.