Huang Jian, vice president of JPMorgan Chase Bank (China): When the industrial upgrading was carried out, foreign institutions laid out China in this way

Affected by the new crown epidemic, Shanghai, as an international financial center, has been forced to "remain silent" for nearly two months, which has also had a great impact on the business of foreign financial institutions in China. In the face of the impact of the epidemic, how can foreign financial institutions help enterprises to bail out? In the process of building shanghai international financial center, how to view the China strategy of international financial institutions? In the process of industrial upgrading, what are the key areas for future economic growth?

With these questions in mind, the reporter interviewed Huang Jian, vice president of JPMorgan Chase Bank (China) Co., Ltd. and president of Global Corporate Bank China, to further look for relevant answers.

Become a bank in the snow

International Finance News: What kind of impact has the COVID-19 pandemic brought to the financial industry? For banks, what preparations and adjustments need to be made at the actual business level?

Huang Jian: From a business perspective, according to the experience of the past two years, not only JPMorgan Chase, but also the entire financial industry, the overall response is still good. The impact of the epidemic on the financial industry can be discussed from two perspectives: one is the empowerment of technology to further support the business progress during the epidemic through digital transformation, and the other is the resilience of the business itself, that is, the preparation of the business continuity plan (BCP) over the past many years has also ushered in a big test.

The upgrade of technology has two main purposes: one is to use the latest technology to help their business better move from offline to online, and the other is to improve the experience brought by customer service.

JPMorgan Chase & Co., a global financial institution and the largest dollar clearing bank, will need to process more than $9 trillion in payments per day in 2021. In the past two years, facing the test of working from home, it is not easy to ensure the normal operation of the business and continuous support for customers.

IFC: How do you see the performance of global corporate banking??

Huang Jian: The entire financial industry has developed to this day, and the competition is fierce, especially in the field of retail banking, which needs to face some new challenges from financial technology companies, but traditional financial institutions still have their own advantages. For banks, it is very important to plan an overall strategy to help the business develop according to its own business advantages.

Compared with the past situation of expanding the balance sheet to a certain extent, and single interest rate differential income as a profit target, banks now need to provide differentiated services. Each bank should formulate different strategies according to its own advantages and lay out different business priorities.

From JPMorgan's perspective, one of our business focuses on how to better tailor solutions for our clients, such as providing liquidity support and payment clearing services for the overseas development of Chinese companies. At the same time, technology can also play a key role in supporting the overseas development of financial companies.

Iftel: What are your expectations for the further development of related businesses in the future?

Jian Huang: In terms of financial bailouts, I think we need to think about how to continue to serve customers better during the pandemic, especially in the midst of various "black swan" events, whether it is facing the epidemic, geopolitical conflict, commodity fluctuations or foreign exchange fluctuations. In a market full of uncertainty, as a bank how to serve its guests, it is crucial to be able to provide the best advice when guests need it most.

In the capital chain, we also need to alleviate the urgent needs of customers in a timely manner, so as to support the real economy well. For example, there is a health product company, in the epidemic situation, the factory because of the isolation of workers, the production capacity declined, bringing financial pressure. As the lead bank for major syndicated loans, JPMorgan Co. coordinated with banks to reorganize their businesses and help them restructure them, thereby extending the repayment period for customers.

"More importantly, by alleviating the pressure on customer funds, so that customers continue to receive support in the capital chain, in the next stage of resuming work and production, it can help the company to increase production capacity faster." Huang Jian told reporters that JPMorgan Chase attaches great importance to this kind of financial bailout work, "we hope to become a bank that can send charcoal in the snow, not just the icing on the cake."

Look at the layout of the Chinese market from the long-term trend

International Finance News: With more than 20 years of experience in the banking industry, how do you view the China strategy of international financial institutions in the process of building an international financial center in Shanghai?

Huang Jian: In the short term, there may be different voices, but we should look at the layout from the perspective of long-term trends. First of all, China is now the world's second largest economy, and although its growth rate has slowed down in recent years, it is still a relatively good and fast-growing economy compared with other countries.

In addition, China's equity and bond market is also very attractive to global investors, and in the long run, such an attractive market is still relatively limited.

At this stage, one of China's development goals is to pay more attention to further supporting sustainable development through industrial upgrading. It is foreseeable that if we can maintain our focus on the transformation in this area and develop towards a better path, the potential of the market will be vast.

International Finance News: How do you view the willingness of foreign investors to invest in China in recent years?

Huang Jian: According to data from the Ministry of Commerce, the amount of foreign capital actually used in China exceeded the trillion yuan mark for the first time in 2021, reaching 1,149.36 billion yuan, an increase of 14.9% year-on-year. In the first quarter of this year, the actual use of foreign capital in the country was 379.87 billion yuan, an increase of 25.6% year-on-year.

Judging from the more than 200 foreign-funded enterprises we have contacted, in the past two years, especially at the worst of the epidemic, overseas production capacity has been affected to a certain extent, but domestic production capacity is on the rise because of "first-in, first-out" in the epidemic. Until the first quarter of this year, we can see a lot of investment in capacity expansion into China. To some extent, it can be said that the domestic production capacity has been running at full capacity for two years, and many foreign-funded enterprises are still in the process of expanding production capacity this year.

With the further opening up of China's financial market, a win-win situation can be further achieved in the post-epidemic era. JPMorgan Chase & Co. has firm confidence in the long-term development of the Chinese market. Although the market is complex and changes quickly, opportunities also exist. As a foreign-funded institution, our advantage lies in the role of a bridge, which requires us to further play a good role as a bridge, such as introducing investment abroad, helping enterprises go out internally, and expanding overseas markets and investment.

In terms of performance, despite the impact of the pandemic and related challenges over the past two years, our business in China has grown steadily. At the same time, when it comes to cross-border transactions, the growth is still considerable.

Seize the development opportunities of industrial transformation and upgrading

Ifsa: How do you see the focus areas of future economic growth?

Huang Jian: Industrial upgrading is the direction of focus. For banks, the selection of cooperative customers also needs to pay attention to relevant details, such as the industry in the upward trend, the position in the industry, and the need to explore the market overseas.

Taking JPMorgan Chase as an example, one of the industries we focus on is new economy enterprises with high-tech production characteristics, as well as clean energy technology industries. After experiencing industrial upgrading and elimination in the past ten years, some Chinese companies have stood out in the world, and the photovoltaic industry is one of them, leading in terms of production capacity and technology.

Under the "30.60" goal, there are more industrial layouts and transformations in full swing. It can be seen that some more traditional power companies have set targets for clean energy power generation, hydropower generation, photovoltaic power generation, and wind power, and hope to gradually reduce the production capacity of thermal power.

In the process of industrial transformation, as a global financial institution, how to start from a global perspective, understand the ideas and demands of customers, and connect with related enterprises to help them achieve better transformation is very important. It is worth noting that in fact, the traditional industry also has many development opportunities, as long as you grasp the main theme of industrial transformation and upgrading, you can still tap a lot of good enterprises and projects.

International Finance News: Green finance has been a hot topic in recent years, what role can financial institutions play in it? How do customers view ESG (environmental, social and corporate governance)?

Huang Jian: I think green development can provide a steady stream of opportunities. Especially after the "30.60" goal is set, a very big leap can be seen. I started working on green bond projects in 2014 and 2015, and over the years I've seen the changes from the beginning when we pushed companies along, to now they've pulled us to hope to learn more about green bonds. In the field of bond issuance and financing in the capital market, green is becoming an increasingly important component. In China, since 2015, JPMorgan has helped leading Chinese financial institutions and corporations issue nearly $26.9 billion in green, ESG and sustainability bonds.

Secondly, further attention should be paid to sustainable development. Achieving the long-term carbon neutrality goal will require a step-by-step plan from now on. From international experience, the relevant goals are very challenging. At the same time, in the process of transformation, the expansion of production capacity, including solar, wind and nuclear energy, will also bring huge investment opportunities.

In terms of community development, JPMorgan believes that there is a need to promote inclusiveness in developed market economies, focusing on small business financing, housing loans and affordable housing, education and health care. From a domestic point of view, it means that the community has developed well, becomes richer, and is good for businesses, banks and all financial institutions.

Overall, the process of urbanization is not over, and it is necessary to consider how to provide affordable housing, education, medical care and other livelihood-related services. As a financial institution, it is even more necessary to play a leading role. Of the roughly $285 billion in financing provided at JPMorgan Chase & Co. level since May last year, 41 percent have been for emerging economies development, 37 percent for green finance and 22 percent for community development.

This article originated from the International Finance News