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Global Bank CEOs' China Balancing Act

Global Bank CEOs' China Balancing Act

by Starling Insights

Starling Insights Editorial Board

Nov 10, 2023


In an opinion piece in the Financial Times, journalist Kaye Wiggins analyzes why several global finance leaders, including David Solomon of Goldman Sachs, James Gorman of Morgan Stanley, and Jane Fraser of Citi, are set to attend a conference hosted by the Hong Kong Monetary Authority this week with the theme "Living with Complexity." 

Despite growing challenges in making profits in China and rising US-China tensions, these executives are attending the event to showcase Hong Kong's role as a vital global financial hub and maintain relationships in the region, Wiggins argues. "When we used to go [to the US], everyone wanted to talk about China," said one senior Hong Kong-based executive who advises investment firms. Now, "it's almost an uncomfortable topic — they try to change the subject." 

The attendees at the conference will likely tread carefully, as they aim to avoid making statements that could alienate their home countries' politicians or be interpreted as either overly optimistic or pessimistic about China. The structure of the event, which is closed to reporters who can only observe through electronic feeds, reflects their caution. An upcoming meeting between President Biden and President Xi, which will take place later this month, further complicates the situation, Wiggins explains.

In our 2022 Compendium, we discussed the national security implications of financial sector integrity with Richard Spencer, former Secretary of the US Navy, Owen West, Assistant Secretary of Defense for Special Operations from 2017-2019, and Timothy O’Neill, a Senior Counselor in Goldman Sachs' Executive Office. In order for firms to effectively manage the culture and conduct risks associated with geopolitical tensions, Spencer calls for the adoption of forward-looking technologies.

"I think we need to ask how we can become more proactive towards risk, rather than reactive," Spencer says. "There are new technology tools nowadays that work to forecast where risk might lie, so you can apply additive controls proactively, before the regulator has to come in.” Potential future geopolitical challenges make this even more critical. ▸ Read More 

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