Global bankers ‘very pro-China’, says UBS chair

Global bankers are all “very pro-China”, UBS chair Colm Kelleher said at a financial forum in Hong Kong, where Chinese officials sought to woo rattled international investors on Wednesday.

Hong Kong is seeking to boost its status as an international financial centre at the conference, after a clampdown on civil society and years of strict pandemic restrictions triggered an exodus and raised concerns the city was losing business to rival Asian hub Singapore.

Chinese officials used pre-recorded video interviews to reassure international investors of the country’s economic strength as it battles a property sector crisis and flagging growth induced by its strict zero-Covid policy.

“We’re not reading the American press, we all buy the [China] story,” said Kelleher, chair of the world’s biggest wealth manager. “But it is a bit [of a matter of] waiting for zero-Covid to open up in China to see what will happen.”

His reference to the media was an apparent joke and nod to earlier remarks made by Fang Xinghai, vice-chair of the China Securities Regulatory Commission, during a pre-recorded segment of the event.

Fang told attendees: “I would advise international investors to find out what’s really going on in China and what’s the real intention of our government by themselves. Don’t read too much of the international media.”

Fang’s comments, which came after a record sell-off of Chinese equities last week in the wake of President Xi Jinping’s consolidation of power, prompted laughs and applause from the audience. “Don’t bet against China and Hong Kong,” he added.

Kelleher was speaking on a panel with David Solomon, chief executive of Goldman Sachs; James Gorman, chief executive of Morgan Stanley; Michael Chae, Blackstone’s chief financial officer; and Liu Jin, president of Bank of China. The panel was moderated by Eddie Yue, head of the Hong Kong Monetary Authority, Hong Kong’s central bank.

Earlier in the day, Yi Gang, governor of the People’s Bank of China, said he hoped to “achieve a soft landing” when asked about the central bank’s support and outlook for its beleaguered property market, which has been battling a liquidity crisis and wave of defaults.

Another message of reassurance came from Xiao Yuanqi, vice-chair of the country’s banking and insurance regulator, who emphasised the low default rate on property loans and mortgages in his speech.

State-run media in China have pushed a narrative of economic resilience and recovery coming out of the Communist party’s 20th congress, where Xi secured an unprecedented third term as leader.

Analysts, however, say that China’s economic outlook has been deteriorating in recent months as Xi’s strict zero-Covid policy has led to lockdowns across large swaths of the country.

Among the latest high-profile lockdowns reported by international media this week, Shanghai Disneyland was shuttered after a single guest tested positive for Covid-19, while workers in Zhengzhou fled the world’s largest iPhone factory to escape the threat of quarantine.

“China’s overall lockdowns have been steadily tightening since August and ratcheted further over the past month,” said Ernan Cui, an analyst at Gavekal Dragonomics in Beijing.

“Even if the Covid containment regime remains largely effective and another wave of lockdowns is mostly avoided, the cost of controlling the sub-variants is clearly rising fast and will further drag on the economy.”

On the sidelines of the forum, Noel Quinn, HSBC group chief executive, said he believed China’s prospects were very positive when asked if he felt Hong Kong was back in business.