China provides 'source of strength to global economy'
Updated: 2013-07-04 07:51
By Chen Jia (China Daily)
JPMorgan sees China as one of the bright spots for the expansion of its global business, said Mike Cavanagh, co-chief executive officer of JPMorgan's Corporate and Investment Bank.
The company plans to continually invest in its businesses in China.
"This is one of the most exciting markets in the word," Cavanagh said. "We have our own locally incorporated bank with seven branches across China and a number of joint ventures in asset management, securities underwriting and futures and options. We promise to continue investing and the momentum is really strong."
In May, China Galaxy Securities Co Ltd and Sinopec Engineering (Group) Co Ltd completed IPOs on the Hong Kong market, raising HK$8.3 billion ($1.07 billion) and HK$13.7 billion respectively.
Fang Fang, CEO of China investment banking at the company, said "According to JPMorgan's pipeline, a few large deals will come to the market during the remainder of the second quarter and the rest of the year."
Cavanagh said: "The world understands that China is a source of strength to the global economy, whether that's with 8 percent, 7 percent or 6 percent growth".
His comment came as economists predicted slower economic growth this year in the world's largest emerging market - close to a 7.5 percent annual increase in gross domestic product, compared with the 7.8 percent rise last year and an average double-digit pace over the past decade.
Zhang Zhiwei, chief economist in China with Nomura Securities Co Ltd, predicted a 30 percent probability to a risk scenario in which GDP growth in China drops below 7 percent in the third or fourth quarter.
"The important thing is to ensure that China continues to show quality, sustainable and long-term growth, rather than worrying about a particular short-term period of time. Experienced investors and businesspeople would much rather focus on the longer-term," said Cavanagh.
"It's really more important that authorities and regulators have visibility into all sectors of the financial system to ensure that safe practices are being followed everywhere. That's a challenging job for the regulators," he said.
The current economic situation in the US is "sound", said Cavanagh, with the housing sector rebounding, people cutting their debt from where they were at the peak of the financial crisis and credit delinquencies falling fast
Cavanagh said JPMorgan's business will continue to focus on cross-border activities, which will grow as globalization trends strengthen. In addition, the cross-border investment flows and trade flows are expected to double, or even triple, over the next few decades.
"Despite all of the challenges our industry has faced, we have continued to invest in the future," Cavanagh said.