Obama campaign attacks Romney on Chinese investments
By Philip Rucker and Jia Lynn Yang,
The Obama campaign has attacked Republican Mitt Romney this week for having investments in China, saying it is inappropriate for a presidential nominee to be investing so much money there.
Former Ohio governor Ted Strickland (D), a campaign co-chairman, said it “defies logic.” “It may not be illegal, it may not be unethical, but it is unseemly,” he said in an interview. “It just leaves a bad taste in your mouth.”
Yet the economies of the United States and China have become so intertwined in recent years that many everyday Americans are invested in the Chinese economy, whether its through international mutual funds or stock holdings in U.S. multinationals — including Apple, McDonald’s and General Motors — that have vast operations in China.
When it comes to the world’s second-biggest economy, it’s hard to avoid being an investor.
“There are many ways to invest in China. It’s not uncommon,” said Fred Dickson, chief market strategist for the Davidson Co. “It’s a normal emerging markets strategy.”
Still, Romney’s investments are strikingly more international than President Obama’s, based on financial disclosures from both candidates.
Romney’s tax returns released this month show that the candidate’s individual trust last year sold off thousands of shares in seven Chinese corporations, including some state-owned firms, for a profit of more than $8,600.
The Chinese firms are among more than 1,000 companies Romney’s blind trust and his family’s trust invested in and later sold in 2011, according to the tax returns. The companies span the globe, ranging from the French aircraft manufacture Dassault Aviation to Canadian yoga clothing retailer Lululemon.
The investments are managed not by Romney but by his longtime trustee R. Bradford Malt. Some investments Malt makes directly; others are investments in funds that he does not necessarily control.
“As we’ve said before, the trustee of the blind trust has said publicly that he will endeavor to make the investments in the blind trust conform to Governor Romney’s positions, and whenever it comes to his attention that there is something inconsistent, he ends the investment,” said Michele Davis, a Romney campaign spokeswoman.
Obama’s investments are squarely domestic.
Based on a public financial disclosure report, the president holds $1 million to $5 million in U.S. Treasury notes, which are sold with terms of two, three, five, seven and 10 years. He also holds $600,000 to $1.25 million in Treasury bills, which have terms of one year or less.
Obama also has $200,000 to $450,000 invested in a Vanguard 500 index fund, which invests in 500 of the largest U.S. companies.
The president has targeted his opponent for his holdings in Chinese firms this week, saying Romney’s investments contradicted his views on China.
“When you see these ads promising to get tough on China — it feels like the fox saying, ‘You know, we need more secure chicken coops.’ I mean, it’s just not credible,” Obama said in a speech in Bowling Green, Ohio, this week.
Romney, meanwhile, has been assailing Obama for what he calls the president’s failure to crack down on the Chinese for manipulating their currency and counterfeiting products patented and designed in the United States, part of a stark appeal to workers across the industrial Midwest.
“When people cheat, that kills jobs,” Romney said at a rally in Ohio on Tuesday. “China has cheated. I will not allow that to continue.”
As his presidential campaign was ramping up in the summer of 2011, Romney’s individual blind trust sold shares in the seven companies, including the state-owned China National Offshore Oil Corp. (CNOOC); Industrial & Commercial Bank of China, one of the country’s biggest state-owned banks; and Tencent, China’s biggest Internet company.
The trust also sold off shares in dozens of other foreign companies during this period, which was particularly volatile for the stock market. Rating agency Standard & Poor’s had just downgraded U.S. debt for the first time in history and the euro crisis appeared to be on the verge of dragging down the rest of the global economy.
Steven Mufson contributed to this report.