Obviously, it's been a few years since
you've held this in-person summit. The last time you and I talked was at
the last time you held one in-person in Beijing in twenty nineteen.
A lot has changed. Why are you willing to go high profile
as a major CEO of a company from America when others they want to stay low
profile and keep their heads low? How do you assess the U.S.
China relationship and the impact it's having on business?
OK. Well, first of all, thrilled to be back
again after all this time. And I think it's important for a CEO to
visit their people and their clients around the world, particularly when you
think times a lot more complicated, etc. But I think it's important for the
viewership to understand there, like three thousand investors here from
around the world. There are hundreds of companies of
Chinese and non Chinese companies learning about the world.
We do research on 500 companies that research circulars the world.
And hopefully business can be a you know, it could be for good to help
countries lift up. I have enormous respect for the Chinese
people. The Marte ization is Covid has been
extraordinary. And yes, there are some very complex
issues that have to be dealt with. At what point does Jamie Diamond have to
become the diplomat? Look, Joe Biden has not spoken to Xi
Jinping since November. The Bali meeting, military to military
discussions are being rebuffed and not even happening.
Business to business is tenuous at best. What role can you and should you play
while you're there? No, no.
I think I would look at a little bit differently.
So there are conversation took place recently.
There have been in the press was a good grade.
I mean, it's hard to resolve issues when you have the echo chamber in your own
brain telling yourself what you already think.
And I think business can be a force for good.
But I don't represent the government. But, you know, everyone knows I'm an
American patriot, so I'm sooner in China, but I'm a red blooded, full
throated, free enterprise capitalist. And so the governments have to talk.
Every government has national security in mind.
And how do they how do they get better now?
Security, and I should point out, is that this global vase has benefited from
trade and it's benefited from all these things taking place.
And so it's lifted and even taking this
country, you know, they had been there. I know there's criticism about the
American global system, but that American global system has done an
extraordinary. It's not American.
You know, if you go to America, a lot of American complain about NATO and WTO and
W8 show and United Nations, but it's lifted up.
Look what it's done for China. I think that the global system has been
fabulous for China. And they may have complaints about just
like the rest of us have complaints, but I'm thrilled to be here again.
You know, we have you have to go see your people and thank you people what
they've done, particularly through this terrible time of Covid, which I think
has done a lot of damage to the world in lots of different ways.
So getting out is the right thing to do. Yeah.
What is your calculus? Has it changed over these four years on
how you want to expand in China? Obviously, you're fully licensed up now.
You were very productive during the pandemic.
You got full JD and full ventures, insecurities and mutual funds and
futures. You you're pretty much well established
on the mainland, which was your goal. But the things have changed.
China's not necessarily the be all end all anymore.
We've had simultaneous crackdowns domestically on the platform economy, on
property, on online gaming, on online education, not to mention Covid 0.
You have a crackdown on consultancies. There's lots of pressure.
I mean, are you recalculating your growth projection and the capability of
that growth in China? What you went through a long list there,
which I wouldn't agree with all of it, but I think when we do visit a country
and we do visit 100 countries around the world, we are there for the citizens of
the country. And we're there hopefully through good
times and bad times, we tend not to leave.
Then there's war or civil war. And so we're not predicting any of that
here. You know, obviously, it's become a far
more complex situation. You know, for film, for good reason,
some not for good reason. And, you know, there's risk.
There's always going to be risk. And I think you'll see companies react
to different things, would give readers some of their own resiliency.
Some is obviously national security will trump all the things.
So and, you know, our government tells us to do A, B and C, we're going to do
A, B and C and support it. And I think there's there's a risk in
China itself that, you know, if you the I've met with several people here, if
you have more uncertainty somewhat caused by the Chinese government, which,
of course, is going to not just change foreign direct investment, which has
gone up a little surprisingly, and I don't think they should assume that's
continue, but it's going to change the people here their own confidence and
ability to to invest and do things. And so,
like I said, if people have deep conversations, respect each other,
engaged properly, I think the American government's had all the right things
recently, which is you heard it from Treasury Secretary Yellen.
Heard from President Biden, you heard it from National Security Adviser Jake
Sullivan, you heard it from Secretary of State Tony Blinken, that this is not
decoupling. This is d risking the world's changed a
little bit. Obviously, they are concerned about the
war in Ukraine. They should be.
I think that is part one of most serious things affecting the future of the
globe. And I mean the future go for next 50
years. And I think they're doing the right
thing. I'm completely supportive of that.
So, you know, China's obviously to do what they think is good for itself.
And business might be a positive attribute.
But but national security will trump all those years.
Now, I was just at G7 where we heard a lot of that rhetoric where there did
risking not decoupling. But again, you know, the Chinese say
it's one and the same. It's America trying to limit China's
rise. And you've seen that before, case.
There's more jargon not to overemphasize all this jargon that's going out there.
But again, do you see these risking being different from decoupling?
Totally. I mean, look, you know, Steve, you look
at the fact trade actually went up and last year and I think these risky means
national security. Now everyone's going to every country
turn out their own way. You know, now we're talking about very
advanced chips. What kind of reasonable, you know, not
to help non allies have things. We can help the military.
You know, obviously there are rare earths and things like that.
So America's going to look at that. They were very clear to me that they
used the word, you know, a small garden with high walls as opposed to
everything. And this, you know, we should hope that
let's not make it everything. I think the basically is trying to help
advise them and that then there's going to be companies doing things just for
their own resiliency. That's a perfectly reasonable thing to
do, too. And then there's the the big one, which
is also this constant negotiation trade on fair trade, free access, fair access
that's been going on for my whole life. Just about every country and country
should learn about when there are legitimate concerns and where they're
not legitimate concerns and like listen to each other deeply and adjust
accordingly. So if you ask me over time.
Yeah. There'll be less trade.
You know, it'll take years for these things to take place, but it won't be a
decoupling and in the world will go on. I think like I said, I think far more
important is what's happening in Ukraine right now.
And so hopefully this will sort out and it'll never sort out if people don't
talk. So I urge people that have some real
deep conversation, get to know each other a little bit, a little bit.
Each other's concerns about today's issues and things would be better if we
had that. What do you have these conversations as
well? Because a lot of people do try to
extrapolate what's happening in Ukraine with the potentiality in East Asia, with
Taiwan. We know Warren Buffett has divested
completely. It's investment, Berkshire Hathaway's
investment in Taiwan Semiconductor. There is nervousness and that creates
hesitancy for investment and fund flows, which are down.
Obviously, trade deals are down. Do you see the direct correlation of the
risks that have risen in East Asia because of Taiwan, because of what's
happening in Ukraine, exacerbating that? Yeah, I think, you know, I'm not an
expert on Taiwan. And I I would defer to Bob Gates and
Henry Kissinger about how to de-escalate that situation and obviously as to the
tension. Things like that.
But remember, this is a world issue. All the kids around the world would be
concerned about Taiwan and the outcome of that.
I think what Ukraine showed people is that the world wasn't safe, that, you
know, oil and gas supply chains aren't safe, food supply lines aren't safe.
You know, everyone is restored to relook at what is national security.
Had Germany importing, I think was half of their natural gas from Russia.
So I think that did cause people look at what are their alliances?
What are their trade? Where are the things?
And obviously, it's causing a lot of confusion and a lot of issues, but
hopefully we'll make a lot of progress on it.
Like I said, that comes with engagement and that comes with, you know, the.
I don't want the American government and other folks, you know, sitting down.
And I don't want to keep on harping on the negative side of it.
But is there any scenario, the worst case scenario that would make your
investment and look, it's a sizable investment in China, make it untenable
for you. You know, Steve, you're going you're
going to repeat yourself over and over. We're here.
We're going to support the Chinese people.
The Chinese government, we do business with a thousand companies here, have
four multinationals coming in here for local companies.
You know, we always have managed our risk that we could handle almost
whatever happens around the world. And I am an American patriot.
I will do it. My government tells me I'm going to
salute like anybody else, but I can tell them what I think.
And you could imagine that I've been very clear when I sit down with them
what I think and what we think matters. And like I said, a lot of the business,
I think could be very helpful in that. This is not a simple matter.
And sometimes to oversimplify things in a way which actually damage, you know,
the ultimate outcomes, will you have an opportunity?
Can you reveal whether you're going to meet with Lee Chung, the premier, or any
of the other senior Chinese leaders? And what would you like to get from
them? I'm I'm me with a very limited amount of
Chinese leaders I've met with one by. Keep their conversation private.
And like I said, you know, I'm here for her people.
I'm here for these clients. I think it's great that this is taking
place. I think humanity is better off this type
of thing. And obviously national security will
reign supreme. And so but you don't stop doing one
because the other. And so I guess I'm thrilled to be here.
And it's amazing, which I would I've seen take place in China the last 25
years, partially because of the global system.
And I think that they should be clear about that.
And, you know, they have their own problems here.
You know, 20 percent unemployment and youth them.
That's a scary number. And so you'll grow.
They need growth, too. And confidence is very important for
growth. When do you see cross-border dealmaking
picking up? It's been quite a nadir on that front.
Of course, border between China and other people are just globally.
Right? Well, let's let's talk about China.
See China, U.S. or outbound from China and the like.
You. I don't know the answer to that.
I think there are always a lot more conversations, you think.
And obviously it's been damped a little bit.
I think America's still open for business.
You know, China's coming here to be a little concerned.
You know, we've we've had syphilis for a long time now.
But I would say we're still Jihye Lee open for business.
And if you're a Chinese company, you want to do something to look at it.
Don't back off just because you're afraid of something.
And you'll get some advice and help in how you go about that the right way.
But America is still open for business. And I think you've heard that from
Secretary Cohen, Secretary Blinken and all those toes.
We still believe in your open and fairly free markets.
Let's pivot to what's happening. The United States, obviously, the debt
ceiling impasse is coming to a head, perhaps with a House vote coming up as
soon as later today or tomorrow, I believe.
Can you kind of tell me what your war room, your debt ceiling, war room is
advising you on the unintended consequences of a default or even be the
ramifications, even if a deal is done in Congress on whether that could mean
higher rates as well as we head towards a possible mild recession?
So I I first I think I think Kevin McCarthy,
Hakeem Jeffries, the president, Chuck Schumer, Mitch McConnell did a
great job and I I think is great. This is this is democracy and
bipartisanship. And I think they did the right thing and
I think it's going to happen. If I thought it wasn't going to happen,
I wouldn't be here right now. So obviously, it's gonna get through a
couple of votes in Congress and our people pretty come to it will happen.
You know, I've been we've been public for years.
If if you action an actual default, it's not good for America.
The financial system, America, the economic economy of America is still the
most prosperous and largest economy the world ever seen, the most innovative,
the most growing. And the rest, the world relies on it.
So I think we shouldn't create any instability there.
So I wish one day we'd get rid the whole debt ceiling thing.
But I understand when you're a democracy, people have different
opinions about what we should be doing. And it's just one tool for one party to
get the other part of the table. So I'm quite optimistic there.
And I really do applaud the fact that they all sat down and spoke.
Got something done. What's your read on inflation, on
whether the Fed will go beyond the pause and hike again?
You know, my simple view is that, you know, they're right to pause at this
point has been a big increase over 500 basis points or so.
Take a pause. But I do think it's possible they're
going to raise a little bit more than the inflation is kind of stickier.
I think people are coming around to that, which means rates may have to go
up a little more. People should be a little prepared for
that. You're just it just is a matter of
manage your own business, be a little prepared for that.
Whether you're a financial company or a real estate company, etc.
I think I'd be a little bit paired for the volatility that might very well be
created by quantitative tightening. We've never really had quantitative
easing, which we've had now for the better part of 15 years.
And now you got to see quantitative tightening and I think the effect may be
harsher than people expect, but hopefully we'll get through all of that
and be OK. How would you assess the banking crisis,
whether we're still facing a banking crisis?
Obviously, you come from a very interesting perch, having taken over a
first republic. Do you see more pain coming down to what
needs to be done on the regulatory front to prevent this from happening again?
Yeah, so so the first thing is it's nothing like, oh, wait, there's nothing
like that leverage in the system. The private the private companies are
actually very good shape. The banking system is in pretty good
shape. You seen regional banks just report very
good numbers. The deposits didn't run out like people
were talking about. This is nothing like that.
There are a couple of banks there offsite this data of size and interest
exposure and things like that. First Republic being one of them.
We were asked by our government to step in and we did and we were able to handle
it. I'm extremely proud.
I hope Jen peeps CAC Marian Lake look at me now.
Like what you all have done. Get an airplane Sunday night to fly out,
talk to people. You know, obviously it's a lot of work
and you know, hard for people. But we're we're trying to show real
humanity. You're using redeployment of anyone who
loses a job to try to find other jobs at JP Morgan or elsewhere.
We have the capability to handle it. I think it's also side, by the way,
because we totally support community banks.
We totally support regional banks. I would be carefully team where
regulations have to be done as opposed to supervision.
And we want to do well. So I want to be very careful.
People go up there. So these this banking system, you know,
we acknowledge that community banks do a lot of things we can't do.
And so I think there are a critical part of the system.
And but so always the JP Morgan know we bank small companies, large companies,
we bank the IMF, the World Bank, we bank Citi, stool states, hospitals, we bank
companies in 30 countries. And so there's a reason that you have
both large and small and all different types.
And so I grow over this part of it for the most part.
There may be something else, but rising rates, if they get high enough, it can
rear its ugly head again. And so I think I can say it's not just
banks. People should be prepared for slightly
higher rates than they've been used to in the past 15 years.
Are there further redundancies necessary associated with First Republic?
We knew we were going to get a plan from you guys by the end of the month.
It's the end of the month. We know maybe a thousand jobs cut, but
there's 7000 employees there. Is there anything you can reveal on what
further tightening is necessary as you integrate that bank?
No. You know, I think the thousand goes less
than what they had planned to do on their own.
And we need a lot of people and, you know, we have a lot of you know, we hire
a lot of people each year. So I use the word redeployment.
We're hoping that almost everyone who might lose their job, there might be
some more. But almost everyone we could say, hey,
we have this other job for you in the same city or something like that.
So, you know, we're pretty good at that. And hopefully we can provide
opportunity. You know, we welcomed the first first
republic people. A company were treated with great
humanity. I hope we're going to learn a lot from
them. You know, very often when you do a deal
like this, you know, people are angry. We're not I've never been part of a
company we didn't buy. Someone emerges somewhere.
You don't learn something from both sides.
And so, you know, they had this wonderful wealth of business, you know,
in banking and wealth management. And, you know, we're we we have a few
things to learn there to do. I mean, I've never seen I've gotten so
many e-mails. We're very happy customers.
And that's a great thing. So what can we learn and what can we do
better for J.P. Morgan Chase
now? Jamie, I know last week you talked a lot
about succession or about your position that you're not talking about retirement
right now. I do need to ask you, though, and your
name has been bandied about for years about public office.
I mean, I don't think Wall Street's too pleased about a potential Trump versus
Biden runoff next year. Is it any has that scenario ever crossed
your mind that you would run for public office or even accept a cabinet
position? You know, obviously, it's crossed my
mind because people mention things to you and stuff like that.
I love my country and maybe one day I'll serve my country in one capacity,
another by love, what I do. I think JP Morgan do a great job for
helping Americans. They'll be countries around the world.
And this is my job. That's why I'm going to do and I'm quite
happy doing it. I still the energy to do what I
mentioned, you know, that when you don't, I think people should give up the
job. Got a fabulous management team where I
really enjoy working with. So I'm here.
