As CEO of Bridgewater Capital, David McCormick arguably has a fiduciary responsibility to invest heavily in China, the world’s second-largest economy. As a likely Republican Senate candidate in Pennsylvania, he has some explaining to do.
Bridgewater Capital is the world’s biggest hedge fund. Over the past few years, under McCormick’s stewardship, the firm has significantly increased its investment in China amid escalating tensions between Beijing and Washington. That could be a sore point with Pennsylvania’s Republican base, dominated by grassroots conservatives who are fiercely loyal to former President Donald Trump and downright hostile to China.
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That could equal trouble for McCormick in the 2022 GOP Senate primary if the Pittsburgh native and West Point graduate quits Bridgewater Capital to enter politics, as is widely anticipated.
“McCormick’s hedge fund ties to China will make him suspect and susceptible to criticism,” Jeffrey Brauer, a political science professor at Keystone College, said Wednesday. “Connections to China do not play well in Pennsylvania.”
The political team advising McCormick as he mulls a Senate bid is dismissing suggestions that the Republican is vulnerable because of the connections to China he has forged through his work for Bridgewater Capital. In an attempt to refute charges that McCormick is soft on Beijing, a Republican operative familiar with his political planning provided a laundry list of comments he has made over several years that indicate he understands the challenge posed by a rising China.
“We now face in China the most serious economic and military rival in a generation,” McCormick wrote in a June op-ed he co-authored that was published by CNBC.
In a statement provided to the Washington Examiner by McCormick’s political team, a former senior official in the Trump White House who backs the Republican vouched for his China bona fides. “McCormick has a strong record as a decorated combat veteran with real experience battling China on the international stage,” the individual said.
“As someone who saw firsthand President Trump challenge China on behalf of the American worker and his refusal to bend to any regime attempting to decapitate American jobs, intellectual property, and national security, Pennsylvania voters can trust McCormick to do the same,” the former Trump White House official added.
In recent years, with rising military and economic friction between Beijing and Washington, Bridgewater Capital has invested hundreds of billions of dollars in China. The hedge fund’s relationship with the authoritarian regime is facing fresh scrutiny after its chairman, Ray Dalio, in a CNBC interview, apologized for Beijing’s brutish treatment of its own citizens and drew a moral equivalence between the repressive Asian dictatorship and the U.S. government.
McCormick, presumably anticipating a run for Senate, was critical of Dalio’s remarks during a conference call with Bridgewater Capital employees. According to Bloomberg News, McCormick emphasized that he disagrees with his chairman’s views on China and said the two of them argue about the matter regularly. McCormick’s allies are distributing the story about the leaked conference call to reporters inquiring about how the Republican’s China ties might affect his expected Senate bid.
However much of a China hawk McCormick might become after entering the Senate race, some past comments reveal a pragmatic businessman resigned to accommodating Beijing given its position as trailing only the United States in size and influence in global financial markets. For instance, in a September 2019 discussion at Carnegie Mellon University in Pittsburgh, McCormick lamented the rise of populism in the U.S. and urged Washington to manage its relationship with Beijing delicately.
“You see populism in the sense that political extremes are emerging, and that makes it difficult to get consensus bipartisan agreement in Washington, and that makes it difficult to have policies that you need within the government to move the economy forward and move the country forward,” McCormick said, according to the Pittsburgh Post-Gazette.
“China is the most important bilateral relationship in the world for our lifetime,” he added. “How we manage that will have huge implications for our economic well-being. It will have huge implications for our position in the world.”
McCormick enjoys a friendly relationship with Trump.
But these remarks suggest the political newbie has not always seen eye to eye with the populist former president on his governing style or his combative approach to China. That could portend problems ahead for McCormick in a primary in which GOP voters are likely to value both populist fire and a confrontational strategy to blunt China’s global rise. It explains why Republicans supporting other candidates are highlighting McCormick’s Bridgewater Capital resume.
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McCormick is certain to have the resources to respond at least. He is personally wealthy and is prepared to invest a considerable amount of his fortune on his Senate campaign.
The race for the Republican nomination for Senate in Pennsylvania was scrambled late last month when Sean Parnell, who was endorsed by Trump, exited the contest to deal with family matters. Since then, Dr. Mehmet Oz, the television personality better known as Dr. Oz, has jumped in, and McCormick is poised to do the same. He would round out the GOP primary field at five candidates.
