What Jamie Dimon’s remarks on China could cost JPMorgan

JPMorgan Chase CEO Jamie Dimon made an offhand remark astir China yesterday (Nov. 23) helium soon came to regret. “We anticipation to beryllium determination for a agelong time,” helium said of the state during a sheet lawsuit astatine the Boston College Chief Executives Club. “The Communist Party is celebrating its 100th year. So is JPMorgan. And I’ll marque you a stake we past longer.”

But Dimon rapidly backtracked. “I was trying to stress the spot and longevity of our company,” helium said successful a statement from JPMorgan today.

The banker is good known for making off-the-cuff remarks: Back successful 2017 Dimon complained astir “the anserine crap we person to woody with successful this country,” referring to issues affecting the fiscal industry successful the US astatine the time. The stakes of these astir caller comments are higher, though, arsenic JPMorgan is presently trying to grow its beingness successful China.

What’s astatine involvement for JPMorgan successful China

JPMorgan stands to suffer arsenic overmuch arsenic $20 billion successful China, according to institution filings. It’s 1 of respective Wall Street banks looking to instrumentality vantage of concern and wealthiness absorption opportunities successful the world’s second-largest economy.

JPMorgan received support successful August from China’s securities regulatory committee to registry for afloat ownership of its securities task successful the country—the archetypal Wall Street steadfast to bash so. Dimon said China represents “one of the largest opportunities successful the world” for the slope and galore of its clients.

“If a US institution oregon slope does not person a China plan, past they are becoming little competitory globally,” says Brandon Hughes, CEO of FAO Global, a consultancy that advises clients connected navigating the US and Chinese markets. He added that businesses approaching China person to run nether the presumption the Communist Party (CCP) is not going distant anytime soon, and immoderate reasoning antagonistic to that would beryllium risky.

JPMorgan has been cautious dealing with China successful the past, telling staff successful 2019 that the peculiar administrative regions of Hong Kong and Macau, arsenic good arsenic self-governing Taiwan, should not beryllium referred to arsenic abstracted countries. But during yesterday’s sheet Dimon said helium didn’t spot China trying to soundlessness executives doing concern successful the country.

“If they commencement to archer you what you tin accidental here, due to the fact that you bash concern successful China, that’s a problem,” helium said. “They haven’t done it. They’re precise smart, they’re precise thoughtful.”

China has yet to respond to Dimon’s remarks

Dimon received immoderate disapproval for his remarks connected China’s Twitter-like platform, Weibo, but for present the astir important subordinate successful this game—the CCP—has stayed soundless connected the issue. Foreign ministry spokesperson Zhao Lijian declined to reply a question astir Dimon during a property briefing today.

“It was an offhand remark, and he’s decidedly alert of the imaginable impact,” Hughes says of Dimon. He said Dimon’s speedy apology shows the JPMorgan enforcement is apt alert of however his comments “could beryllium misconstrued.”

China is presently pursuing a crackdown connected businesses some wrong and extracurricular of the state that’s unlikely to fto up anytime soon. A caller collapsed deal by the concern radical Blackstone illustrated the imaginable hazards of doing concern successful China. While the firm’s co-founder Stephen Schwarzman was truthful connected to the state helium was dubbed arsenic erstwhile US president Donald Trump’s “China whisperer,” a $3 cardinal woody by Blackstone to bargain Soho China, the spot developer,  fell through successful September aft Chinese regulatory officials enactment an extremity to it.

Still, this crackdown seems to beryllium targeting concern elites wrong China much than overseas executives, Hughes adds. “China has yet to effort to power a overseas CEO oregon institution to the grade that they’re trying to support stableness and power implicit Chinese net-worth individuals and CEOs,” helium says.