Jamie Dimon, CEO of JPMorgan, warned that tensions between the United States and China have upended the international system, making dealing with it more complex than it was during the Cold War.
On a day when manufacturing data showed the recovery in the world’s second-largest economy faltering, Dimon also argued that “uncertainty” about Beijing’s policies would hurt investor confidence.
“Hopefully we can work out all these differences, you know, with China and America and what they do to other allies and relationships and things like that,” he said in closed-door comments at the JPMorgan conference in Shanghai.
“We didn’t really have that [complexity] Really since World War II. . . “I wouldn’t put the Cold War in that category,” he added, according to an audio recording of the event.
JPMorgan did not immediately comment.
Dimon’s comments during his first visit to mainland China in four years came as a downturn in Chinese factory activity cast doubt on the country’s growth prospects, rattling regional stock markets against the backdrop of worsening relations with the United States.
If you have more uncertainty, caused to some extent by the Chinese government. . . Not only will this change FDI, Dimon told Bloomberg Television, in response to questions about China’s policy on Covid-19 and its crackdown on consultants and the technology sector. “People here will change their self-confidence.”
China is struggling to revive economic growth, Wednesday’s figures showed, after abandoning its zero-Covid policy at the end of last year.
The official manufacturing PMI fell to 48.8 for May, compared to 49.2 in April, according to the National Bureau of Statistics.
The data led Hong Kong’s Hang Seng China Enterprises Index, which tracks major companies on the mainland, up nearly 2 percent on Wednesday, sending the benchmark index down more than 20 percent from its January peak and into a bear market. .
The renminbi slipped 0.5 percent to 7.1128 renminbi per dollar, down about 3 percent from the year so far.
Economists said that if the PMI remains below 50 for several months, indicating contraction, the government will consider stimulus policies.
China’s economy grew rapidly in the first quarter, but the recovery has since faltered. High hopes for business reopening were undermined by a lack of investor confidence and geopolitical tensions after the United States shot down a suspected Chinese spy balloon and increased sanctions on semiconductors.
Beijing has also raided foreign groups such as Bain & Company, Capvision and due diligence group Mintz, and increased regulation of domestic players in the private sector, including tech firms and education firms.
Real estate investment, credit and industrial profits fell, while indicators such as retail sales fell short of analysts’ expectations, casting doubt on the government’s full-year growth target of 5 percent.
Foreign direct investment in China, according to one of the Ministry of Commerce’s key benchmarks, rose 2.2 percent in the first four months of 2023 to just under 500 billion renminbi, although in dollar terms it fell 3.3 percent to $73.5 billion.
At the JPMorgan conference, Dimon said that while he sometimes complained about regulators in the bank’s home market, the US system had a “plus side.”
“Transparency, investor protection, the rule of law, the ability to do business in large markets, the presence of appropriate corrupt practices – this is actually good for the country. It is good for the financial markets. It is good for capital,” he said.
Dimon’s visit to Shanghai is one of several high-profile trips by foreign executives as China reopens. Elon Musk, CEO of Tesla, flew to Beijing this week and met with Foreign Minister Chen Gang.
JPMorgan has invested heavily on the mainland, where the government has given foreign companies greater flexibility to set up their own financial firms as part of a push to develop a largely closed financial system. In 2018, Dimon said in Beijing that “we have been building here for 100 years.”
The bank’s Shanghai conference, which included speeches by Henry Kissinger and Robin Li, CEO of Baidu, drew about 3,000 people. It was largely closed to the media.
Additional reporting by William Langley, Andy Lin and Hudson Lockett in Hong Kong
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