By Denise Wee and Cathy Chan
(Bloomberg) — Jamie Dimon’s eyebrow-raising joke about JPMorgan Chase & Co. outlasting China’s Communist Party has so far been met by public silence from officials in Beijing.
But with nearly US$20 billion of exposure in the world’s second-largest economy — and big ambitions to expand even further — the U.S. bank has a lot riding on maintaining cordial relations with a government that’s sensitive about anything that might be construed as questioning its legitimacy.
In a sign that JPMorgan is attuned to the risk of blowback, members of the bank’s government relations team and China offices had internal discussions about Dimon’s remarks after he spoke at a panel discussion on Tuesday, according to a person familiar with the matter.
While some executives expressed concern that the joke could be viewed as insensitive, the government relations team told the group that Dimon intended to stress the longevity of JPMorgan’s China business rather than criticise the party. As of midday Wednesday in China, the bank hadn’t communicated with government officials on the issue, the person said, asking not to be identified discussing private information.
A JPMorgan spokesperson declined to comment. When asked for comment at a regular press briefing on Wednesday, Chinese Foreign Ministry Spokesman Zhao Lijian said: “Is it really necessary to cite such remarks that are merely to attract people’s attention?”
Chinese media, often quick to criticise perceived slights against the country by international companies, have yet to cover Dimon’s joke even as they wrote about several of his other comments on cryptocurrencies and U.S. policy risks.
“We hope to be there for a long time,” Dimon said of China while speaking at the Boston College Chief Executives Club. He also relayed a joke he made during a recent visit to Hong Kong: “The Communist Party is celebrating its 100th year. So is JPMorgan. And I’ll make you a bet we last longer.”
JPMorgan earlier this year became the first Wall Street bank to gain full ownership of a securities venture in China and has said it is investing 2.67 billion yuan (US$410 million) in China Merchants Bank Co.’s wealth management unit. The bank’s total exposure to China stood at US$19.7 billion as of September, mainly from lending and deposits, trading and investing, according to a regulatory filing.
JPMorgan in China:
Fully owns JPMorgan Securities (China) Ltd.
Fully owns JPMorgan Futures Co.
Seeking full ownership of China International Fund Management Co.
Investing US$410 million in China Merchants Bank’s wealth management arm
JPMorgan Chase Bank (China) Co. operates eight branches with 61.3 billion yuan in assets by end 2020
Beijing has a history of taking action against companies and individuals that appear to slight the government or challenge its policies, particularly on sensitive issues including Taiwan, which Dimon also referenced on Tuesday.
In 2019, UBS Group AG came under pressure to fire its chief economist, Paul Donovan, after he made a comment about a “Chinese pig” in a note about rising consumer prices. He later apologized, saying it was “innocently intended.” China broke off relations with Norway for several years after dissident Liu Xiaobo received the Nobel Peace Prize.
China’s financial markets are a potent lure for the world’s biggest banks, with billions of potential profits on the line in investment banking and wealth management. Wall Street firms are ramping up their presence the country despite elevated U.S.-China tensions and an increasingly opaque regulatory environment as President Xi Jinping cracks down on swathes of the private sector.
© 2021 Bloomberg L.P.