Wall Street Digs In To China

U.S. politicians are taking a tougher line on the country, but bankers say they have to be there

- Cathy Chan and David Scanlan

As tensions were rising between the U.S. and China last summer, the chief executive officer of JPMorgan Chase & Co. was letting it be known that he wanted to get to Hong Kong as soon as he could. Jamie Dimon did just that in November, becoming the first major U.S. bank executive to visit Greater China since the pandemic began. His 32-hour trip to the Asian financial hub was billed as a chance to thank thousands of employees there. But it was also a reminder of the company’s commitment to the territory, as well as to mainland China, where JPMorgan has exposure of about $20 billion, mainly from lending, deposits, trading, and investments.

Some U.S. politicians have been calling for companies to back away from China, over concerns about national security and human rights. But Wall Street banks are instead deepening their ties. JPMorgan in August took full control of a securities joint venture with a Chinese company, and now wants to do the same with an asset management business it partly owns. Morgan Stanley is seeking five new banking licenses in mainland China in 2022, while Goldman Sachs Group Inc. has been doubling its workforce. Citigroup Inc. applied in December for a securities trading and investment banking permit and plans to seek a futures license in 2022.