Jamie Dimon, CEO of JPMorgan, the largest bank in the U.S. and the world’s largest bank by market capitalization, is by any measure a successful and powerful man and by virtue of his global leadership position, should be an inspiration to his industry as well as to the general public.
But he has to apologize to the Communist Party of China (CCP) for speaking his mind and for saying what he believes in. In normal circumstances, his candor makes him more authentic and thus appreciated by investors and analysts.
However, to the CCP, this is a taboo and China has a long record of punishing companies that do not sufficiently show loyalty to the party and toeing the party line as seen in the recent cases of H&M and Nike, among others. The CCP has demonstrated time and again, ironically to its own detriment, that it is willing to shut down, blacklist or censor businesses.
Additionally, over the past year, the CCP has been cracking down on private enterprise, brainwashing the masses and using class struggle against the bourgeoisie who controls the capital and means of production, in a bid to return the country to the Cultural Revolution era.
Against this backdrop and General Secretary Xi Jinping’s policy of self-isolation, CEOs and investors are now facing an unprecedented risk in a country where politics and business are tightly intertwined. They have to show total deference to the CCP in order to continue doing business in China and to gain access to the country’s markets.
For Xi, politics trumps everything, even the health of the economy, and for him to cement his grip on politics, there can only be one narrative, the CCP one. Therefore, there can be no dissent, criticism, challenge and slight, whether real or perceived.
Dimon fails to stand up for his belief
On November 23, Dimon, speaking at the Boston College Chief Executives Club in the U.S., said: “I made a joke the other day that the Communist Party is celebrating its 100th year, so is JPMorgan. I’d make a bet that we last longer.” He added: “I can’t say that in China. They are probably listening anyway.”
Dimon also compared the political and economic environment in both countries, saying that in the U.S, “we have the gifts of our founding fathers: freedom of speech, freedom of religion, freedom of enterprise, freedom of human capital, immigration.
“If you opened up the doors of America, a billion people would come here. If you open the doors to China, how many people do you think will go there?”
And at one point, he also said that “Obviously, I don’t have freedom of speech in China” and “I don’t have it in Hong Kong anymore either.”
However, on the next day, Dimon walked back his comments and apologized to China.
The perils of doing business in China
Dimon’s apology brings out the important fact that he as an American citizen was speaking in the U.S., the land of the free where the freedom of speech is enshrined in the First Amendment, and yet he has to apologize to another country which is 7,233 miles away, for his belief.
With his apology, Dimon has further cemented the precedent of kowtowing to the CCP. This dangerous practice has empowered and emboldened the CCP to dictate what one can say or cannot say, even outside of China.
CEOs and investors cannot ignore the political risks of doing business in China. The CCP can at any moment revoke their right to do business. JPMorgan is heavily invested in China and Dimon did what he has to do to maintain his balance sheet.
Be that as it may, in the wider ideological context, this incident has shown the world that JPMorgan is willing to accept communism over democracy and money over freedom. And this is simply not right.