A photo taken on May 1, 2023 shows a sign at the JPMorgan Chase headquarters in New York, USA.
Michael Nagel | Xinhua News Agency | Getty Images
JPMorgan Asia-Pacific CEO Sjoerd Lienert said on Thursday that China is too big to ignore and investors “must do business in China”, adding that the country is becoming a second world class. He added that China has emerged as a superpower.
International companies are still investing in the economic powerhouse, and “this is a very important place,” Lienat told CNBC’s Sri Jegaraja at the 20th Global China Summit in Shanghai.
In purchasing power parity terms, China currently accounts for 19% of world GDP and 48% of Asia’s GDP.
“You can’t ignore it. You have to do business in China and even if you decide not to do business there, you need to understand what’s going on,” Lienert said, adding that what happens in China “affects every industry around the world.”
Lienert stressed that a “high level of activity” in China was needed for investment banking to flourish, given China’s close ties to the region.
“If China doesn’t move, Asian banking won’t be able to operate at full speed,” he said.
But he said investors were hoping for further signs of economic recovery to restore confidence in China, whose economy has stagnated in recent years, dragged down by a struggling real estate sector.
“We think investors will be encouraged by the early signs,” said the investment bank’s Asia-Pacific CEO.
China’s economy grew faster than expected in the first quarter, according to official data released by China’s National Bureau of Statistics in April. Gross domestic product (GDP) rose 5.3% year-on-year in the January-March period, exceeding the 5.2% increase in the fourth quarter of 2023 and the 4.6% increase expected by economists polled by Reuters. .
Lienert said foreign direct investment into the country fell last year, but this must be seen in the context of FDI growth over the past 50 years, adding: “Every market will pause.”
China remains the largest trading partner for more than 120 countries. It is also the largest trading partner for Japan, South Korea, Taiwan and Vietnam, according to the Wilson Center, a U.S. think tank.
“I [China] “We have a lot to sell to the world, and our products will be needed all over the world,” Lienert said, adding that he sees a lot of opportunity in China.
“We’ve been here for 103 years, so we have a long-term view of China and intend to be here for another 100 years,” he said.
