December3 , 2021

JPMorgan CEO Made A China Joke. Then Came The Big Damage Control

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JPMorgan Chase & Co chief Jamie Dimon knew the financial institution must engineer a hasty retreat. (File)

JPMorgan Chase & Co chief Jamie Dimon knew as quickly because the phrases got here out of his mouth that the joke about China may land him in scorching water.

“I was just in Hong Kong, I made a joke that the Communist Party is celebrating its 100th year. So is JPMorgan. And I’ll make you a bet we last longer,” he stated on Tuesday at a Boston occasion. Then he added: “I can’t say that in China. They probably are listening anyway.”

Dimon, no stranger to brashness, additionally knew the financial institution must engineer a hasty retreat. Soon, members of the agency’s government-relations workforce and China places of work had been corralled to debate the remarks and determine whether or not to acknowledge them or allow them to lie. Some 18 hours later, when it turned clear that the feedback attracted world consideration, Dimon issued a press release of remorse.

“Hundreds of individuals, companies and organizations have apologized for hurting the feelings of the Chinese Communist Party,” stated Isaac Stone Fish, founding father of Strategy Risks, which makes a speciality of company relationships with China. The means Dimon stated that he regrets his remark “is a smarter way to do it.”

Dimon’s remarks, made throughout a go to to the Boston College Chief Executives Club, comply with a slew of home and worldwide journeys as JPMorgan’s chief government officer continues to tout a US financial increase that is additionally put him on the entrance of Wall Street’s return-to-office push. But his latest journey efforts have been considerably problematic — the quarantine exemption he earned for his Hong Kong go to, a dispensation additionally afforded to actress Nicole Kidman, garnered a lot native criticism.

Now he is having to downplay his Boston feedback — and it is not the primary time. Dimon has a historical past of provocative remarks that he is been pressured to stroll again. In 2018, he vowed at a philanthropy occasion that he may beat Donald Trump in an election as a result of he was smarter than the president, solely to place out a press release hours later saying he should not have stated it.

Dimon’s brag and apology reminded one other Wall Street chief government whose agency is an enormous JPMorgan shareholder of Lloyd Blankfein’s joke years in the past that Goldman Sachs Group Inc. was doing “God’s work.” The makes an attempt financial institution bosses make to be witty tackle lives of their very own, stated the chief, who requested for anonymity to keep away from connecting his title to a multitude. Dimon will even doubtless get via any fallout, simply as Blankfein did, however the distraction will likely be unwelcome, the chief stated.

The mea culpa underscores JPMorgan’s need to maintain cordial relations in China, the place it has almost $20 billion of publicity and has ambitions to broaden additional. Earlier this yr, the financial institution received approval from Chinese regulators to totally personal its China securities enterprise and desires to keep up its good standing within the nation for additional licensing requests, notably forward of main management adjustments within the celebration anticipated subsequent yr.

Careful Balance

And whereas Dimon’s remarks have been met at the least to date with silence from Chinese authorities officers, the nation has a historical past of taking motion towards firms and people that seem to problem its insurance policies, particularly on delicate points just like the Communist Party’s legitimacy or Taiwan. UBS Group AG got here beneath strain to fireside its chief economist in 2019, Paul Donovan, after he made a remark a few “Chinese pig” in a be aware about rising client costs. He later apologized, saying it was “innocently intended.”

Dimon’s retreat additionally highlights the highway companies must tread fastidiously when coping with a authorities delicate to perceived slights in a rustic the place potential earnings are excessive. In 2019, after the Houston Rockets basic supervisor tweeted a message of help for Hong Kong protesters, National Basketball Association Commissioner Adam Silver was criticized for attempting to appease each side in his preliminary response.  

Last yr, when dealing with a backlash for referring to Hong Kong and Taiwan as international locations, vogue manufacturers Coach and Versace rapidly despatched apologies to calm customers and proper their web sites to point out their respect for “the feelings of the Chinese people” and “national sovereignty.

China Opportunity

Still, Dimon has enjoyed plenty of goodwill in China, which he has long eyed for its huge opportunities. He’s also attuned to the risks. In his 66-page annual letter to shareholders this year, Dimon dedicated more than a page to the country, writing that over the last 40 years, China has “carried out a extremely efficient job” with economic development. But he cautioned that in the next 40 years, the country will have to confront serious issues including lack of resources, corruption and income inequality.

Dimon stopped short of calling out the CCP by name, but noted that only 100 million people in China “successfully take part” in the nation’s one-party political system, a lower participation level than any other developed nation.

“China’s latest success positively has its management feeling assured,” Dimon wrote in April. “Growing center courses virtually at all times demand political energy, which helps clarify why autocratic management virtually at all times falters in a bigger, extra complicated financial system.”

His comments also come as the US and China continue to grapple with protracted standoffs on issues such as market access, data security and international stock listings. Wall Street has also been trying to improve relations with the country in a bid to gain access to its $54 trillion financial system.

It remains to be seen if Dimon’s comments will spark any retaliation from China, said Stone Fish, though he suspects that this may be where the debacle ends.

“Companies and people are waking as much as the concept what occurs in China or the China area would not keep in China,” he said. “It has actual world implications for them and their companies within the United States.”

(Except for the headline, this story has not been edited by NDTV employees and is printed from a syndicated feed.)

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