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

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JPMorgan Chase & Co chief Jamie Dimon knew the bank would have to stage a hasty retirement. (To file)

JPMorgan Chase & Co chief Jamie Dimon knew as soon as the words left his mouth that the China joke could put him in hot water.

“I was just in Hong Kong, I made a joke that the Communist Party is turning 100. So is JPMorgan. And I’m betting you we’ll last longer,” he said on Tuesday. at an event in Boston. Then he added, “I can’t say that in China. They’re probably listening anyway.”

Dimon, who was no stranger to brash, also knew the bank would have to stage a hasty retreat. Soon, members of the company’s government relations team and Chinese offices were gathered to discuss the remarks and decide whether to acknowledge them or let them lie. Some 18 hours later, when it became apparent that the comments had captured the world’s attention, Dimon issued a statement of regret.

“Hundreds of individuals, businesses and organizations have apologized for hurting the feelings of the Chinese Communist Party,” said Isaac Stone Fish, founder of Strategy Risks, specializing in corporate relations with China . The way Dimon said he regretted his comment “is a smarter way to do it.”

Dimon’s remarks, made during a visit to the Boston College Chief Executives Club, follow a series of domestic and international trips as the JPMorgan CEO continues to tout a US economic boom that also puts him ahead of the comeback to the power of Wall Street. to push. But his recent travel efforts have been somewhat problematic – the quarantine exemption he obtained for his visit to Hong Kong, a waiver also granted to actress Nicole Kidman, has drawn widespread local criticism.

Now he has to downplay his comments about Boston – and it’s not the first time. Dimon has a history of provocative remarks that he was forced to backtrack. In 2018, he swore at a philanthropic event that he could beat Donald Trump in an election because he was smarter than the president, only to issue a statement hours later saying he didn’t shouldn’t have said so.

Dimon’s bragging and apology reminded another Wall Street CEO whose company is a large shareholder of JPMorgan of Lloyd Blankfein’s joke years ago that Goldman Sachs Group Inc. was doing “God’s work. “. Attempts by bank bosses to be witty take their own lives, said the executive, who requested anonymity to avoid tying his name to a mess. Dimon will likely overcome any fallout, as will Blankfein, but the distraction will be unwelcome, the executive said.

The mea culpa underscores JPMorgan’s desire to maintain cordial relations in China, where it has nearly $ 20 billion in exposure and has the ambition to grow further. Earlier this year, the bank gained approval from Chinese regulators to fully own its securities business in China and wants to maintain its good reputation in the country for new license applications, especially ahead of major changes in leadership in the country. party expected next year.

Careful balance

And while Dimon’s remarks have at least so far met with silence from Chinese government officials, the country has a habit of taking action against companies and individuals who appear to challenge his policies, especially on issues sensitive like the legitimacy of the Communist Party or Taiwan. UBS Group AG has come under pressure to fire its chief economist in 2019, Paul Donovan, after commenting on a “Chinese pig” in a note on rising consumer prices. He later apologized, claiming it was “innocent intention”.

Dimon’s retreat also highlights the road companies need to tread carefully when dealing with a government sensitive to perceived slights in a country with high potential profits. In 2019, after Houston Rockets general manager tweeted a message of support for protesters in Hong Kong, National Basketball Association commissioner Adam Silver was criticized for trying to appease both sides in his initial response. .

Last year, in the face of backlash for labeling Hong Kong and Taiwan as countries, fashion brands Coach and Versace quickly sent out apologies to calm consumers down and correct their websites to show their respect for “the feelings of the people. Chinese “and” national sovereignty “.

Opportunity in China

Still, Dimon has enjoyed a lot of goodwill in China, which he has long envisioned for his enormous opportunities. He is also sensitive to risks. In his 66-page annual letter to shareholders this year, Dimon devoted more than one page to the country, writing that over the past 40 years, China has “done a very effective job” in economic development. But he warned that over the next 40 years, the country will face serious challenges, including lack of resources, corruption and income inequality.

Dimon stopped before calling the CCP by its name, but noted that only 100 million people in China “actually participate” in the country’s one-party political system, a lower level of participation than any other country. developed.

China’s recent success has definitely made its leaders feel confident,” Dimon wrote in April. “The growing middle classes almost always demand political power, which is why autocratic leadership almost always falters in a larger and more complex economy. “

His comments also come as the United States and China continue to grapple with prolonged deadlocks on issues such as market access, data security and international stock quotes. Wall Street has also tried to improve its relations with the country in an attempt to gain access to its $ 54 trillion financial system.

It remains to be seen whether Dimon’s comments will trigger retaliation from China, Stone Fish said, although he suspects this may be where the debacle ends.

“Businesses and individuals are realizing that what happens in China or in the Chinese space does not stay in China,” he said. “This has real implications for them and their businesses in the United States.”

(Except for the title, this story was not edited by DAILYNEWSCATCH staff and is posted from a syndicated feed.)

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