Explained: JP Morgan boss Jamie Dimon’s mea culpa on China

At a panel event, JP Morgan boss Jamie Dimon made a joke about the American banking giant’s ability to outlast China’s Communist Party, which he soon came to regret.
“The Communist Party is celebrating its 100th year. So is JPMorgan. And I’ll make you a bet we last longer…”I can’t say that in China. They probably are listening anyway,” the 65-year-old veteran banker said at the Boston College Chief Executives Club panel discussion.
JPMorgan has been operating in China since 1921, the same year the Communist Party was founded there.
Sure enough, the comment sparked anger in China. Hu Xijin, editor of the state-backed Global Times newspaper, said on Twitter: “Think long-term! And I bet the CPC [Chinese Communist Party] will outlast the USA.” Dimon also received criticism on Weibo but the Foreign Ministry spokesman Zhao Lijian during an interview with Bloomberg said “Why the publicity stunt with some grandstanding remarks?”
Experts have, however, warned that his comment could jeopardise the bank’s ambitions in the country, which has been trying to gain a bigger foothold there. Earlier this year, the bank won regulatory approval to become the first full foreign owner of a securities brokerage in China.
Why the damage control?
And then came the damage control: Dimon had to issue an apology soon after. ” I regret and should not have made that comment,” he said in a statement, adding that he was only trying to “emphasise the strength” of the bank.
In a later statement, Dimon said: “It’s never right to joke about or denigrate any group of people, whether it’s a country, its leadership, or any part of a society and culture. Speaking in that way can take away from constructive and thoughtful dialogue in society, which is needed now more than ever.”
“Dimon’s apology shows the degree of deference foreign businesses have to show to the Chinese government in order to remain in its good graces and maintain access to the country’s markets,” Eswar Prasad, a professor at Cornell University told Reuters.
Not the first time
This is not the first time Dimon has had to backtrack. In September 2018, Dimon said he could beat President Donald Trump in a campaign because he was smarter than Trump. And, Dimon added, he had earned his wealth and did not get it from his father. Within an hour Dimon released a written statement saying that he should not have made the comment and he added that his original comments had proved that he “wouldn’t make a good politician”.
“The mea culpa underscores JPMorgan’s desire to keep cordial relations in China, where it has nearly $20 billion of exposure and has ambitions to expand further…and wants to maintain its good standing in the country for further licensing requests, particularly ahead of major leadership changes in the party expected next year,” writes Bloomberg’s Hannah Levitt.
Why CEOs need to tread carefully in China
Foreign companies are desperately trying to hold on to lucrative opportunities in China, even as new regulations and the pandemic have made international operations tougher. Moreover, the country has a history of taking action against companies and individuals that appear to challenge its policies.
China is currently pursuing a crackdown on businesses both within and outside of the country, and global CEOs have to tread carefully while discussing China, where several foreign companies have been subject to a backlash in the past for perceived offences. For instance, in 2019, Swiss bank UBS lost a lucrative financial contract in China because one of its senior economists’ comment about food inflation and swine fever was interpreted as a racist slur.
Earlier this year, Swedish fashion giant H&M and US-based Nike faced backlash and boycott calls from Chinese state media and ecommerce platforms after expressing concern about allegations of forced labour in Xinjiang.
In 2020, when facing a backlash for referring to Hong Kong and Taiwan as countries, fashion brands Coach and Versace had to issue apologies to calm consumers and correct their websites to show their respect for “the feelings of the Chinese people” and “national sovereignty.
In 2019, the NBA was dropped by Chinese broadcasters after Houston Rockets general manager Daryl Morey tweeted a message of support for pro-democracy protestors in Hong Kong
In November 2018, Italian fashion house Dolce & Gabbana’s promotional videos depicting a Chinese woman using chopsticks to eat food like pizza and cannoli clumsily angered Chinese consumers who saw them as racist and sexist. D&G had to remove the videos from Chinese platforms, while several Chinese retailers pulled the brand’s products. Balenciaga and Burberry have also offended consumers with clumsy ad campaigns related to Chinese holidays.
In 2017, several Chinese companies refused to do business with South Korea’s Lotte Group, after it agreed to provide land to host a US anti-missile system that Beijing sees as a threat to national security.
With inputs from agencies

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