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I’m shocked—shocked!—that Donald Trump has a Chinese bank account

October 22, 2020, 12:13 PM UTC

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This week we learned, via the New York Times, that President Donald Trump has invested in a handful of small Chinese companies, has an account with a Chinese bank, and paid nearly $200,000 in taxes in China while pursuing licensing deals there from 2013 to 2015.

Trump’s political rivals were quick to exploit the report. “Can you imagine if I had a secret Chinese bank account when I was running for re-election?” asked Trump’s White House predecessor, Barack Obama, in mock horror. “They would’ve called me Beijing Barry!”

House Speaker Nancy Pelosi called Trump’s newly disclosed account a “serious national security issue.

It’s not hard to understand the gleeful tone of Obama’s taunt. Trump has excoriated American companies for doing business in China for years. And as Joe Biden emerged as front-runner in the Democratic primaries, Trump has sought to portray the former vice president as “soft on China,” and discredit his son Hunter as financially beholden to Beijing.

“China ate your lunch, Joe,” Trump sneered in the first presidential debate.

In the aftermath of that debate, Washington Post columnist Josh Rogin opined that, “for all its confusion and chaos,” one thing the encounter highlighted vividly is that our national policy debate on China is “fundamentally broken.”

Rogin’s right. Obama’s faux outrage over Trump’s “secret China bank account” underscores the point.

The Times reports that the bank account was held by Trump International Hotels, not Trump himself. Alan Garten, a lawyer for the Trump Organization, declined to identify the Chinese bank, but told the Times that the account had been opened with a U.S. branch of the lender in order to pay local taxes associated with efforts to do business in China. Garten said the company opened the account after establishing a business office in China “to explore the potential for hotel deals in Asia,” but that “no deals, transactions or other business activities ever materialized and, since 2015, the office has remained inactive.”

Does the Times‘ “revelation” that Trump opened an account with Chinese bank and chased licensing deals in China before he became president show the cynicism and hypocrisy of his anti-Chinese bombast since becoming a politician? Yes. Is there any reliable evidence to support Trump’s assertions about Hunter Biden’s business dealings in China? No. Should Trump have disclosed his own Chinese business dealings when he declared his candidacy in the last election? Of course.

But should we be shocked, appalled, outraged that, before he became a presidential candidate, Trump sought, as the Times puts it, “to join the myriad American firms that have long done business” in the world’s second-largest economy? Absolutely not.

At the risk of stating the obvious: Of itself, doing business in China is not a crime. It shouldn’t automatically be deplored as unpatriotic, a national security threat, or morally reprehensible.

And yet one would never guess that from the rhetoric on the U.S. campaign trail, where any association with China now is decried by leaders from both parties. As Rogin notes: “China has become so politicized that politicians can seemingly talk about it only as an attack line—even though both parties know their voters want substantive responses to China’s malign actions….”

This week brought more evidence (as if it were needed) that American businesses can’t afford to indiscriminately “decouple” from China. China’s third-quarter GDP numbers, announced Monday, showed China’s economy expanded by 4.9% compared to the same period last year—slower than the 6% pace of the second quarter but enough to make it the world’s only major growth engine. The International Monetary Fund upgraded its forecast for China’s full-year GDP to 1.9%; the Fund expects the U.S. to contract by 4.3% in 2020. Next year, the IMF predicts growth in China to rise to 8.2%, compared to a gain of 3.1% for the U.S.

Meanwhile, news of Trump’s Chinese bank account and tax payments has inspired much mirth on Chinese social media, where users joked that “Comrade Trump” was just paying his Communist Party membership dues.

This week’s Eastworld Spotlight conversation is with Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations. Huang tells us why China will struggle to meet its ambitious target to be carbon neutral by 2060.

More Eastworld news below.

Clay Chandler
clay.chandler@fortune.com

This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com

Eastworld news

Fox-conned

In Wisconsin, locals hoped the Foxconn factory that President Trump claimed credit for would help the state regain its manufacturing prowess. Instead, roughly three years after Foxconn announced the project, and Wisconsin agreed to heavily subsidize it, neither the company nor the state has anything meaningful to show for it. Foxconn ultimately decided that going through with its initial manufacturing plans would be too costly, and instead hired workers to do nothing in order to meet tax-break requirements. The company also spent years “jumping from idea to idea—fish farms, exporting ice cream, storing boats—in an increasingly surreal search for some way to generate money from a doomed project," according to The Verge.

The cobalt vault

China has a stranglehold over cobalt, a mineral used in lithium-ion batteries that may be the key to the future of the global electric vehicle industry. Cobalt is mined almost exclusively in the Democratic Republic of Congo, but nearly two decades ago China made a long-term bet to invest in Congo cobalt mines and build its own cobalt refining facilities in China. Now, companies like Tesla are seeking to reduce their dependence on Chinese cobalt, but the cobalt-free batteries still underperform their cobalt-based competitors. With the global electric vehicle market expected to boom in coming years, China’s cobalt leverage may give it an upper hand. The Wire China

No rest in Thailand

On Wednesday, Thailand Prime Minister Prayuth Chan-ocha said that he would make the “first move to de-escalate” tensions between the government and pro-democracy protesters, and announced that he would lift Bangkok’s week-old state of emergency order that was aimed at quelling the protest movement. In the last week, thousands of activists have defied Chan-ocha’s emergency order by taking to the streets; they continued to call for his resignation, along with a slate of other reforms to Thailand’s government and monarchy, even after his latest concession. New York Times

'Not anybody's guinea pig'

This week, Brazil authorities gave a vote of confidence to China’s Sinovac vaccine maker, and Sao Paolo Governor Joao Doria said that Sinovac’s CoronaVac candidate was the “safest” and “most promising” of the numerous vaccines being tested in Brazil. On Wednesday, Brazilian President Jair Bolsonaro shot back at the governor, writing on Twitter that Brazil wouldn’t be “anyone’s guinea pig” and wouldn’t purchase the vaccine. Fortune 

Xi's rise to power

Chinese President Xi Jinping has arguably amassed more power than any Chinese leader since Mao Zedong, the founder of modern-day China. But, unlike Mao, Xi is a “disciplinarian, not a revolutionary,” the Los Angeles Times writes in a profile of China's president this week. “[Xi] speaks in Marxist terms of class struggle and uses Maoist tactics such as self-criticism and rectification,” the LAT writes. “But his brand of communism also promotes Confucius and e-commerce.” Los Angeles Times

Coronavirus by country

Singapore 

Since June, Singapore has been in what it calls ‘phase two’ of its reopening process. Businesses like malls and restaurants are largely reopened, but they must adhere to restrictions like limits on group gatherings and early closing hours. Now, as Singapore’s new COVID-19 cases dwindle to just a handful per day, the city is making plans for a full economic reopening. But officials there say the re-opening may hinge on whether Singaporeans become more willing to be tracked on their smartphones. Currently 45% of Singapore residents are on TraceTogether, the government-run contact tracing app. Officials say that 70% may need to download it before the city considers further easing of social-distancing rules, such as raising group gathering limits and re-opening more entertainment venues like nightclubs and karaoke parlors. SCMP

 

Markets and movers

Ant Group — The Alibaba-backed Chinese fintech firm won final approval from Chinese regulators for its upcoming blockbuster dual IPO in Hong Kong and Shanghai. Ant Group is reportedly aiming to raise $35 billion, which would make it the world’s largest ever debut. Reuters 

Cathay Pacific – Hong Kong’s flagship airline is cutting 8,500 jobs and closing down its subsidiary, Dragon Air, as it endures heavy losses from the pandemic, the company announced this week. “The future remains highly uncertain, and it is clear that recovery is slow,” Cathay said on Wednesday. Fortune

Renrenche – The Chinese online car dealer, which was once one of the country’s hottest tech unicorns and valued at $1.4 billion, may be sold for just over $1,000 as it faces bankruptcy amid the downfall of China’s once-booming sharing economy. Bloomberg

Didi Chuxing – On Tuesday, Reuters reported that China’s largest ride-hailer is considering a debut in Hong Kong in the first half of 2021 and may target a $60 billion valuation in the IPO. Didi Chuxing denied the report to Chinese state media. Reuters 

Huawei – Sweden became the latest country this week to ban the Chinese telecom operators Huawei and ZTE from building its 5G networks, and argued that the companies posed a national security threat. Financial Times

Final figure

$1.5 trillion

In China, like in the U.S. and elsewhere, the pandemic has been boom time billionaires. Over the past year, China has minted 278 new billionaires and, in total, Chinese billionaires have added $1.5 trillion to their wealth, according to a new report from the Hurun Report, a research firm based in Shanghai. “The world has never seen this much wealth created in just one year,” Rupert Hoogewerf, founder of Hurun, said in a statement. “China’s entrepreneurs have done much better than expected. Despite COVID-19, they have risen to record levels.” Alibaba’s Jack Ma ($58.8 billion) and Tencent’s Pony Ma ($57.4 billion) ranked one and two on the list, boosting their fortunes by 45% and 50%, respectively, over the past year. Meanwhile, China’s bottom 60% of households lost a reported $200 billion in income amid the pandemic. CNBC