During a recent trip to the Boston College Chief Executives Club, JPMorgan CEO Jamie Dimon joked that JPMorgan would outlast the CCP as both organisations celebrate the centenary of their founding. Historically, China’s autocrats have a minimal sense of humour – especially regarding their fallibility – meaning that they didn’t see the funny side of Dimon’s remark.
As is generally the case when an executive tries to be funny, the remark prompted an emergency meeting of the various PR teams within the firm to assess the damage. An anonymous Wall Street bigwig put it well in time.com, saying that ‘the attempts bank bosses make to be witty take on lives of their own.’ In this case, the government-relations team liaised with the Chinese offices to predict the Chinese response and essentially draft an apology.
In a development that surprised nobody, Dimon very swiftly backtracked on the comment he’d made. He claimed that he was only trying to ‘emphasise the strength and longevity of the company’ but regretted the remark as it’s not ok to ‘joke about or denigrates any group of people.’ This was following the frosty response of Zhao Lijiam, a government spokesperson, who described the remark as a “publicity stunt.” Meanwhile, the editor of the Global Times, Hu Xijin, reacted more abrasively and claimed that the “CCP will outlast the USA”, let alone JPMorgan.
There are a few conclusions to be drawn from this episode, but, most importantly, it reinforced the firm grip of the CCP over every facet of the US industry. JPMorgan is especially vulnerable to Chinese intervention given that it has almost 20 billion dollars of exposure in the country (more than any investment bank bar Citibank) and the newly received right to own its Chinese securities venture. Therefore, the likes of Dimon must be careful with their words.
The Chinese government is more than happy to punish large financial powerhouses, as was the case with UBS in 2019 when an executive commented about inflation of food prices and swine fever that was misinterpreted as a slur. Consequently, the Swiss bank lost a plum role on a bond deal for a client backed by the CCP. Moreover, this Chinese oversight extends beyond financial institutions, whether Disney removing African American actors from their film promotions in China, the National Basketball Association disciplining their athletes who speak out against the cultural genocide of Uighur Muslims or Nike apologising for objecting to forced labour in Xinjiang. Ultimately, when such a large market is at stake, large multinationals have no choice but to kowtow to Beijing.
On a lighter note, Dimon’s bad joke also contains an interesting question, who really will last longer? On the one hand, the CCP has the resources of a nation-state and very little democratic accountability, whilst US investment banks are at the mercy of market forces. On the other hand, as Dimon himself wrote in a 66-page annual letter to shareholders, the emergent Chinese middle class may object to their lack of freedoms as economic growth slows down in the long run. It’s hard to know which organisation will outlast the other, but their values are opposed. The answer to the question has profound implications for the future global economy. If pressed, my money would be on the CCP, but I’d love to be proved wrong.
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