Will Steve Bannon be the same person who opened the White House door for Donald Trump and also the one who kick-starts a 21st century Watergate scandal?

The arrest of former White House chief strategist Steve Bannon, who was also Donald Trump's election campaign advisor, has drawn attention around the world, as observers believe it could have an impact as huge as the Watergate scandal to US politics and the 2020 presidential election, while Chinese analysts are paying attention to the potential impact to China-US relations.

Bannon was arrested Thursday after being charged with defrauding hundreds of thousands of donors through his "We Build the Wall" fundraising campaign, CNBC reported on Thursday.

Bannon and three associates were indicted in a federal investigation in the Southern District of New York. Prosecutors allege the four defrauded donors by raising "more than $25 million to build a wall along the southern border of the United States," but some of that money was used for personal gain.

Asked about the matter Thursday, Trump said he felt "very badly," but asserted of Bannon "I haven't been dealing with him for a very long period of time." He said he felt the private fundraising effort was "something I very much thought was inappropriate to be doing."

"I don't like that project," Trump said. "I thought it was being done for showboating reasons," the president said, according to the Washington Post.

Bannon, who masterminded Trump's run for president in 2016 and was White House chief advisor, is under arrest for allegedly defrauding hundreds of thousands of donors in connection with a US-Mexico border wall online fundraising campaign, according to an unsealed indictment by the US district court of the Southern District of New York.

With regards to Bannon's case, it is not the first time that the Republicans are caught in a trouble in legal cases ahead of the November election. 

On the same day, Trump's effort to fight a subpoena for his tax records issued by the Manhattan district attorney was rejected by a federal judge in Democrats-controlled New York, according to CNBC. The move is another loss to the president in a high-profile case that has already made its way to the Supreme Court, the report said.

New York's attorney general has also announced a lawsuit aimed at dissolving the powerful National Rifle Association (NRA) over alleged financial mismanagement, media reported in June. The NRA is closely aligned with the Trump Administration and the Republican Party. The NRA and its affiliates raised more than $412 million and spent more than $423 million in 2018, according to some reports.

The arrest of Bannon occurred 75 days ahead of the presidential election, which led observers to say the case could be closely related to the election with complex political factors likely to be involved. 

It could be the Democratic Party's meddling, or the result of manipulation of Trump's opponents inside the Republican Party, Li Haidong, a professor at the Institute of International Relations at the China Foreign Affairs University, told the Global Times on Thursday.

Bannon, who was expected to play a part and give a little push to Trump in this year's election, has become a negative asset to the Trump camp, and it won't be shocking to see Trump severing ties with Bannon right away, Li said.

To what extent Trump was involved in the case, and if the fund Bannon raised was used to serve Trump's political agenda or directly to fund his campaign this year, are yet to be determined. And if it's proven, the impact of the case would be similar to the Watergate scandal, Li noted.

Chinese observers are closely watching how this new episode would weigh on the tense China-US ties.

In China, Bannon is called "the living fossil of paranoid madness" because his attitude toward China can no longer be described as hostility. It can be said to be hysterical, or even insane. He once claimed that the China-US trade dispute was a "fundamental clash." Bannon simply has no idea about the globalized world and the complexity of major power relations. He is trying to make greed and fear the basic guideline for the US' China policy, according to some Chinese observers.

Jin Canrong, associate dean of Renmin University of China's School of International Studies in Beijing, told the Global Times on Thursday that Bannon's arrest could infuriate white conservative populists who strongly supported him, and might believe that the pro-establishment forces set Bannon up.

"The populists would be angered and react radically. This could lead to a significant impact on the presidential election, and make the election more unpredictable," he noted.

About half century ago, the Watergate scandal had caused a pause in the establishment China-US diplomatic ties, and now, 75 days before the possible rotation of ruling parties in the US, which could also be a turning point of China-US relations, Chinese observers are paying close attention to the impact the incident could bring to the rocky relations between the two great powers.