UBS sets a troubling financial precedent in China

Haitong International Securities

17/06/2019 02:43

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Alec Macfarlane
    HONG KONG, June 17 (Reuters Breakingviews) - The Swiss bank
put economist Paul Donovan on leave after misconstrued comments
triggered outrage in the mainland. Local rivals fed the
unwarranted flare-up. The episode hints at new pressures for
outsiders in the country; excessive subservience, however,
creates bigger headaches.
    Full view will be published shortly.
    On Twitter https://twitter.com/AlecMac11
    
    CONTEXT NEWS
    - Paul Donovan, chief economist of UBS Global Wealth
Management, has been asked by the Swiss bank to take a leave of
absence, a spokesman said on June 14, after comments on food
inflation and swine fever included a reference to pigs that was
perceived as a racist slur.
    - Donovan said in a podcast on June 12 that food prices in
China had risen mainly due to the epidemic. “Does this matter?
It matters if you are a Chinese pig,” he said. “It matters if
you like eating pork in China.”
    - Haitong International subsequently suspended all
collaboration with UBS, including corporate finance and trading,
Haitong International said in an email to Reuters.
    - The Chinese Securities Association of Hong Kong, whose
member firms include offshore subsidiaries of Chinese brokerages
and fund houses, demanded on June 13 that UBS dismiss Donovan
and issue a formal apology from the board. It also called for
companies and individuals to consider carefully when it comes to
conducting business with the Swiss bank.
    - For previous columns by the author, Reuters customers can
click on  MAC/ 
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UBS puts economist on leave in growing China pig row   
 urn:newsml:reuters.com:*:nL4N23L133
BREAKINGVIEWS - Citi plays longer game in China     urn:newsml:reuters.com:*:nL3N1Z911U
BREAKINGVIEWS - UBS takes just one small step for banks in China
    urn:newsml:reuters.com:*:nL4N1Y602Q
BREAKINGVIEWS - Western banks in China can downplay equities   
 urn:newsml:reuters.com:*:nL3N1T12B0
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 (Editing by Clara Ferreira Marques and Katrina Hamlin)
 ((alec.macfarlane@thomsonreuters.com; Reuters Messaging:
alec.macfarlane.thomsonreuters.com@reuters.net))