JPMorgan effect casts chill over firms' hiring practices in China
Demand for offspring of influential mainlanders takes a fall amid controversy over employment
Western financial institutions and Chinese firms have become more cautious about employing potentially influential mainlanders in the wake of publicity over JP Morgan's repeated hiring of well-connected Chinese.
"I know for a fact that my clients are being cautious. This includes Chinese corporates and Western financial institutions," said Basil Hwang, a Hong Kong-based partner at Zhong Lun, a mainland law firm.
"Virtually every global financial institution and multinational, whether Western or Chinese, is careful today of any perception that they are granting favours in return for business.
"Both the US and UK are very sensitive of any company doing favours for anyone. There is increasing sensitivity among Chinese authorities towards corruption."
JP Morgan, the biggest US bank by assets, recently stopped work on the Hong Kong listing of Tianhe Chemicals shortly after Joyce Wei, a daughter of the mainland firm's chairman, left the bank for a job at UBS, the South China Morning Post reported on January 22.
Tianhe was the second initial public offering JP Morgan dropped in quick succession, having withdrawn in November from China Everbright Bank's offering in Hong Kong.