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.