China-US relations

Trump’s advisory council member Jamie Dimon urges US, China to revive dialogue on economy, defence

PUBLISHED : Saturday, 03 June, 2017, 11:39am
UPDATED : Thursday, 06 July, 2017, 11:33pm

The governments of the United States and China, stewards of the world’s two largest economies, should revive the process and mechanism for a regular dialogue about economic, strategic and defence matters, said one of the business leaders who advises the American president.

“Put everything that’s important on the table,” said Jamie Dimon, chairman and chief executive of JPMorgan Chase and a member of Donald Trump’s business advisory council.

Besides economics, trade and education, “there should be a consistent political and defence dialogue about the world”, not just about the South China Sea, but also issues from North Korea’s nuclear weapons programme to the Middle East peace process, he said.

“We all have a common interest in getting these things right, and you’re not going to get them right if you don’t talk about it,” Dimon said during an interview in Hong Kong with the South China Morning Post.

The US and China had been conducting half-yearly meetings called the strategic economic dialogue since 2006 during the administrations of George W. Bush and former Chinese president Hu Jintao. Headed by treasury and finance ministry officials in both countries, five such dialogues were held between 2006 and 2008.

During the Barack Obama administration and the years under Hu and his successor Xi Jinping, the strategic economic dialogue was expanded to give the US State Department a greater role and renamed the strategic and economic dialogue.

Trump, who came to occupy the White House with no prior experience in public office and governing, has surrounded himself with military men, business leaders and Wall Street executives for advice and counsel, in addition to the family members who form his inner circle.

Several of them make up the business advisory council, led by Blackstone Group’s chief executive Stephen Schwarzman and comprising Dimon, PepsiCo’s chief executive Indra Nooyi and General Motors chief executive Mary Barra.

Things have not gone well with Trump’s new administration, leading to three business advisers quitting since February.

Uber Technologies co-founder Travis Kalanick was first to resign after he faced blowback from Uber drivers and riders over Trump’s executive order on immigration.

Tesla’s chief executive Elon Musk and Walt Disney’s chief executive Bob Iger both quit their advisory roles this week after Trump announced he would pull the US from the Paris climate accord.

Dimon himself does not agree with everything that Trump says or does and “absolutely disagreed” with Trump’s decision to withdraw from the Paris pact.

“I don’t know anyone who agrees with everything that a president or prime minister says,” Dimon said. The key was to “engage each other and have more open dialogue”, he said.

Head of the largest US bank since 2004, Dimon, 61, has spent his career making deals all over the world, with years in Asia and China. Some of the experience may offer alternatives to the new president and help him ditch his campaign rhetoric for the art of governance.

China was not a currency manipulator although the country had engaged in trade practices that were not entirely free or fair, Dimon said, citing cybersecurity, intellectual property, tariffs and the non-fulfilment of World Trade Organisation obligations.

“I think the Chinese know that, and I don’t think they deny that. But it’s not about yelling and screaming and pointing fingers, it’s about sitting down, having a constructive dialogue”, and recognising that “what might have been fair 15 years ago may not be fair today”, he said.

The country was also making efforts and progress towards becoming a market economy, he said.

What matters to American businesses, including the ones headed by Trump’s corporate advisers, is the WTO’s principle of reciprocal right to markets, particularly one with the size of China’s 1.3 billion people.

“I don’t think many people among the US business community operating in China were particularly concerned about whether China was manipulating the yuan,” said Andrew Gilholm, director of analysis, Greater China and North Asia, at Control Risks. “They are more concerned about reciprocity.”

China’s banking regulator in March loosened the licensing requirement on foreign banks, part of the process of liberalising the financial industry, a move that is lauded by the man whose bank reports US$700 million in revenue from China.

“One day as China opens, I want to own 100 per cent of our activities in China, not 49 per cent, and do anything,” he said. “I honestly believe that 49 per cent ownership could be a structural issue.”

An open market would help China improve the efficiency of state enterprises and nip corruption in the country, he said, adding that his bank could play an important part in helping to improve corporate disclosure and enhance corporate standards of Chinese companies.

Dimon, who got an earful from investors during JPMorgan’s shareholders’ meeting three weeks ago for his advisory role in the Trump circle, said he would continue to offer his counsel.

“I am a patriot, I want to help the president to do a better job,” he said. The president is the pilot of a plane, and “if you’re in an air plane, you’d better be rooting for that pilot”.