Back in May, JPMorgan CEO Jamie Dimon was in an emotional state during his first visit to China since the outbreak of the coronavirus.
The bank boss is delighted to be relaunching the company’s investor conference in Shanghai, saying it will help make the world “a better place”.economist at the bank Very optimistic Regarding China’s GDP growth in the post-epidemic period.Beijing regulators have previously approved The Wall Street bank will join JPMorgan Chase & Co.’s foreign-owned securities and futures firm in taking full control of its China mutual funds.
Five months later, Dimon was even more pessimistic. On Monday, the Wall Street CEO reportedly said he was now “extremely cautious” about the Chinese economy. Reuters.
Speaking at a Barclays conference in New York, Dimon said China’s “risk-reward” was once “very good” and was now just “okay.”
“The stakes are high,” he continued.
Dimon’s pessimistic view of China’s economy echoes that of the bank he runs. In April, JPMorgan economists said they expected China’s economy to up 6.4%This was an increase of 0.4 percentage points from the previous forecast, indicating that consumption and travel will rebound as a result of reopening.
JPMorgan reversed course in August, slashing GDP growth in 2023 The forecast is 4.8%, below China’s current growth target of about 5%.
Frequent revisions show the difficulty of understanding China’s economy after years of “zero epidemics.”
China’s post-pandemic recovery is losing momentum amid weak domestic consumption and a slowing global economy. Retail sales and industrial production in July interest rates rise lower than economists expected. Export in August down 8.8% same time last year. China is also facing a youth unemployment crisis, with youth unemployment reaching 21.3% in June. (China has since stopped publishing youth unemployment rates). Instability in the real estate sector has also weighed on the economy, as developer Country Garden tries to avoid defaulting.
China is to release August retail sales, industrial activity and home sales data on Friday.
“Good times and bad”
Dimon is one of the few Western CEOs to travel to China since it reopened late last year. (Apple’s Tim Cook, Tesla’s Elon Musk, Intel’s Pat Gelsinger and Qualcomm’s Cristiano Amon are some of the other U.S. CEOs who have visited China. )
during an interview Bloomberg During his visit in May, Dimon said he had “great respect for the Chinese people” and pledged that JPMorgan would stay in China “hopefully through the good times and the bad times.”
The CEO of J.P. Morgan also dismissed concerns about the growing rift between China and the United States, predicting that a possible decline in trade “will not cause decoupling and the world will continue to evolve.”
But even so, Dimon warn “More uncertainty, created in part by the Chinese government,” could hurt investor confidence.
The country’s private sector is still recovering from a years-long regulatory crackdown that slowed deals and reduced investor interest.
Chinese authorities now need approval for listings in overseas markets such as the United States and Hong Kong, leaving many IPO candidates waiting for approval. public. According to reports, as of June, no U.S. bank has participated in IPOs in mainland China this year. Financial Times.
American investors also Be cautious about investing in China, given deteriorating relations between Washington and Beijing.According to statistics, Chinese venture capital funds are now struggling to raise funds at the levels they were a few years ago. information.
China’s new data security law also complicates problems for banks such as JPMorgan Chase & Co. Eddy Wong, chief executive of the bank’s China fund managers, reportedly told an industry conference in June that “more and more resources and personnel” are needed to meet the need to protect Chinese data. Nikkei Asia.
Beijing has also cracked down on, and even raided, companies that provide analysis of the Chinese economy an expert consulting firm on grounds of national security and espionage. Western consulting firms are reportedly slowing down their operations in China, with Bain telling new employees in China to wait until 2025 at the latest to start working. Financial Times in July.
Svlook