Is CIC getting a preferential treatment when it wants its money back?

Paulson: Houston,
we have a problem
via WikipediaWhen I first read that the China Investment Corporation (CIC) claimed it would get all its USD 5.4 bn back from the Reserve Primary, I had to laugh a bit. In the whole world creditors are trying to get their money back from failing banks and European governments trying to get money back from Iceland, both for private investors and for local governments that stored their money in Iceland. The UK initially even used anti-terrorism laws to freeze Icelandic assets to get some extra cards in their sleeves. That now has not become common practise, since the world is not at war with Iceland - that is, not yet at least.
But there might be still some money to scramble for. Lehman Brothers and other banks might be bankrupt, but they still had assets that can be sold. I'm fortunately not an expert on bankruptcy, but I do know that in those cases bigger lenders - for example banks - would be the first to get their money back, because they have claimed a preferential treatment when they gave the loan.
Now, CIC is representing the central government and they might have a good position to claim such a preferential treatment, even if that was not part of the original small print. The US economy would be in deep trouble if China would decide not to put their saving in US bonds anymore.
What would I do when I was, Mr Henry M. Paulson Jr, the secretary of the treasury in the US? I would not wait till the Chinese government is asking for preferential treatment under any pay-back scheme. I would offer that without being asked. CIC says it is preparing a claim in court. It might not have to, if they play the political card.
That might make some of the other parties - also hoping to see back some of their money - pretty upset. But that is life: the United States has to guarantee China it will see its money back in the long run, otherwise it might be in bigger trouble.

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