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China Asked to Pay Reparations

Is it valid in all Fairness after FDI Ban?

The state of Missouri has filed a lawsuit against the Chinese government over the coronavirus crisis on 21 April, claiming that China’s officials are to blame for the devastating outbreak that’s sweeping the globe.

Missouri Attorney General Eric Schmitt’s office said he filed a lawsuit against the Chinese government, Chinese Communist Party and other Chinese officials and institutions, alleging they suppressed information, arrested whistle blowers and denied the severity of coronavirus. Schmitt claims these actions led to “irreparable damage” in countries around the world, and a loss of life and severe economic consequences in Missouri.

A Washington-based advocacy group and a Texas company had filed a class-action lawsuit against the Chinese government on March 24, demanding $20 trillion compensation for the damages caused by the pandemic, following one filed in Florida on March 12 and another filed in Nevada on March 23.

After EU, Australia and the US instituting a ban on any hostile takeovers from China, or its subsidiaries in South East Asia, India followed suit recently, after Chinese OBOR tainted bank- the Chinese Developmental Bank, was found to be predating on stakes in HDFC Bank in India. With respect to the revised FDI policy, investments from China will now require a clearance from the Centre.

In a more unswerving and scathing attack on China, Trump has recently warned that China should face consequences if it was “knowingly responsible” for the coronavirus pandemic, as deaths in Europe from COVID-19 approached the  100,000 mark .“It could have been stopped in China before it started and it wasn’t, and the whole world is suffering because of it,” Trump said.

Classic Case of China owing Reparations?

Historically, the term “reparations” dealt primarily with the indemnification of states ravaged by war, such as those required of Germany, by the Versailles Treaty after World War I, and the 1921 London Schedule of Payments required Germany to pay 132 billion gold marks (US$33 billion) in reparations to cover civilian damage caused during the war and the WW-II ,where according to the Potsdam Conference held between July 17 and August 2, 1945, Germany was to pay the Allies US$23 billion mainly in machinery and manufacturing plants.

More recently, after the Gulf War, Iraq accepted United Nations Security Council Resolution 687, which declared Iraq’s financial liability for damage caused in its invasion of Kuwait, at $52.4 billion to approximately 1.5 million successful claimants, as of July 2019.

In 1946, the US Congress created the Indian Claims Commission, a body designed to hear historic grievances and compensate American-Indian tribes for lost territories. It commissioned extensive historical research and ended up awarding in reparations, about $1.3 billion to 176 tribes and bands. The money was largely compensated to groups, which then distributed the money among their members.

Later, the U.S. offered “redress” to some 82,000 Japanese Americans, who were incarcerated as “enemy aliens” during World War II. The 1988 Civil Liberties Act granted a presidential apology and $20,000 to each living person who had been detained based on the recommendations of a commission created by Congress in 1980, to examine the causes of the “internment.”

Reparations carry enormous significance based on justice, and most countries out of moral obligations accept such, like America most recently, that is exploring the idea of compensation to a portion of its people the African-American, for  behaviour of its own nation in history, by another portion.

While some instances like of Israel, who are liable to pay, the displaced Palestinians, compensation as per UN General Assembly Resolutions in 1947-48, however they contest it and in their own right, seek $250b compensation for Jews forced out of Arab countries.

Reparations significance in International Law

Under international law, “reparation must, as far as possible, wipe out all the consequences of the illegal act and re-establish the situation which would, in all probability, have existed if that act had not been committed.”

While till recently, reparations of the injustice committed in WW-II, Germany paid the last instalment in 2012 to the US. The importance of providing reparations in international law cannot be undermined any less. Beyond the moral significance of redressing a historical injustice, insistence that states have an obligation to provide reparations (restitution and/or compensation), for giving rise to the conditions that create dire conditions, to life and economic sustenance, would serve as a deterrent to states which resort to wilful neglect resulting in alacritous personal, social, and economic costs.

Global Implications

Chinese Assets Worldwide liable

While China’s response of the Lawsuits filed in the US, actions by the EU, Australia and India to safeguard their assets and rhetoric of Trump, is of disdain and apathy. Though China may refuse to acknowledge, but not until it shows the absence of “an act of international terrorism in the United States” and/or a tortious act by a foreign state that cannot be an omission and that does not constitute “mere negligence.”

 Even disregarding the Jurisdiction under International Law, China can be pursued, as China’s conduct with respect to COVID-19 (and the novel coronavirus SARS-CoV-2) violated the International Health Regulations, in particular the obligations of timely notification and information-sharing in Articles 6 and 7. Had China complied with these obligations, there would arguably be exponentially fewer cases of COVID-19 today.

However even if found culpable on the above charges, by the International Court of Law, China may refuse to indemnify the losses worldwide. What is of paramount importance here, is how the countries globally are viewing the same.

It is public that most of South East Asia, Central and South America and Europe are now safeguarding their assets, from poaching by the Chinese. NATO sounded the alarm in March, though without naming names.” The geopolitical effects of the pandemic could be significant,” said NATO Secretary-General Jens Stoltenberg in web conference of defence ministers on Wednesday. “Some allies are more vulnerable for situations where critical infrastructure can be sold out,” he said. Of course, he meant China. China has been busy bidding for Greek ports since December 2019. French are scurrying to Africa, where they have influence, especially North and Central African countries, to discover and desist to any hostile bid to take over assets.

Reparations Against Overseas Holdings of China

Critical infrastructure, including seaports and the investments by China Ocean Shipping Corporation (COSCO) in the Ports and related infrastructure in Europe, in the garb of Belt and Road Initiative (BRI) and in particular its maritime component, the Maritime Silk Road (MSR), has been on the rise since last decade.

COSCO, owns 90% of the only terminal operator in Belgium. COSCO has a 51% stake in and managerial control of port terminals in Valencia and Bilbao, Spain. They also have minority stakes in other terminals in Antwerp, Las Palmas and Rotterdam.

Also, By the end of December 2019, the Chinese government had signed 193 cooperation agreements with 125 countries and 29 international organizations. The Belt and Road has supposedly expanded from Asia and Europe, to include more new participants in Africa, Latin America and the South Pacific.

Chinese seem to be everywhere, with their purse open, to lure unsuspecting companies and nations. Where China is now caught off-balance, is the fact that, unlike the US, it lacks the wherewithal to impose ownership on these FDI based assets, in case the US-led world decide, that China does owe reparations for COVID-19.

At present, China’s military will is limited to the South China Sea peninsular, which too according to experts is a fallacy. This is also a given, in case US, Japan, Australia and South Korea amongst themselves, decide to take on the resurgent Chinese Navy in the area. The South China Sea is a composite; however, the next relevant military positioning by the US Armed forces is here, after Afghanistan-Iraq posture, hence has to be a separate focus of analysis, better left for some other time, but soon.

Suffice to say, the Chinese FDIs, BRI and MSR assets lack Military capability by the PLA, to implement the intent. And that is the soft underbelly, that is exposed.

Should the International Court of Law or world economies decide to levy reparations on China, seizure of assets and dissolution of FDIs in South East Asia, Africa, Europe and Latin America, will be quite in order. Especially while China lack the Military might to effect its will, pan all the continents.

China lay bare to this threat, which is real and all very germane.


Given the growing distrust of China, across most Western countries and in many other parts of the world, it is hardly surprising that the calls to disengage with China are growing. It is visible and equally unsurprising, that Washington is now beginning to take steps to reduce its dependence on China for its pharmaceutical requirements, as a begining. There is a growing awareness in other countries that they, too, are at great risk because of their dependence on China for their economic sustenance.

Xi is right to fear the growing distrust and the growing re-evaluation of ties to China, by major multinational and even smaller organisations. The response is same old, Chinese Government has threatened to blacklist foreign organisations that do not comply with its diktats, initiated operations to influence domestic and global public opinion and sought to influence global organisations such as the United Nations.

That effort is being dismantled, however, by the increasing international awareness that a number of past global pandemics, including SARS, African Swine Fever and avian influenza, have all originated in China. Those issues, call into question China’s claim of offering an alternative model to democracy and its claim to being a global role model. Beijing’s use of blackmail is now very known to all, by its decision to terminate the export of rare-earth minerals to Japan because of their territorial disputes in the East China Sea, has not commended it internationally.

China’s FDI investments and sporadic takeover of assets, like in Sri Lanka and in few African countries can be easily contested and Chinese can be made to leave, in lieu of reparations. Since March, in South China Seas, there has been intensive domination-patrolling and aggressive posturing by the US, British, French and Australian Navies. This is especially near the Spratly Islands off the coast of Vietnam and around Taiwan.

While reparations many not come to fore explicitly, however, now when world powers table it on international fora, they mean business. It definitely will be a chance for many countries, which have been netted by China under Debt-Trap diplomacy and also regarding their assets, which Chinese state-owned banks and organizations have poached upon.

Nations are answerable for their doings, while the US answers and commit to reparations for three-century old crimes, against Afro-Americans and Native-Indians, it is unlikely that China can run amok, without consequences. This clamour is not without reason and backdrop, and for few third world countries, it will be a chance for redemption, while stricken in the Chinese Debt-Trap since long.

23 Apr 20/Thursday                                                                                       Written By: Fayaz

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