As part of JPMorgan's drive to enhance its China business, the US investment bank recently hired the highly experienced China banker, Jing Ulrich. Her new role is as head of markets for China.
"The role is unique in a lot of ways," says Ulrich. "That's because I'm responsible for expanding the bank's onshore and offshore business across different asset classes including fixed income and equities. I'll also continue to play a significant role with global institutional investors on their China investment strategy. The main goal for me is to continue to add value to the firm's overall China franchise by bridging the gap between Chinese companies, government and investors."
Ulrich continues, "We have a lot of new initiatives earmarked in China including our inaugural conference in Beijing this coming November, which is a high level forum for world leaders, government officials and investors to share information and promote a better understanding of China. We're expecting over 1,000 investors and over 80 companies to attend this forum, which gives you some idea of the global interest in China as an investment destination."
Ulrich, who was born and raised in China but studied at Harvard and Stanford, spent seven years at CLSA before joining Deutsche. She recently left the German bank to take on her new role at JPMorgan.
"At Deutsche Bank, I was head of greater China equities and at CLSA, I was head of China research," says Ulrich. "In both roles, the most satisfying part of the job was building a highly successful team. At JPMorgan, it offers me an even bigger global platform and chance to work alongside some of our industry's most highly regarded professionals."
Ulrich started out as a China analyst, and says the changes occurring in China today are among the most exciting she has witnessed. "Over the past 14 years, I've seen interest in China increase dramatically from the early 90s when only dedicated China funds were interested in the country. Now investors around the world in different asset classes are showing an interest - China now matters to the world."
The current reform of the A share market is one of the key changes she sees. "Reform in the A share market is long overdue. The government is making $279 billion worth of non-tradable shares, now tradable in the coming two years. This will remove any overhang. But this is not a fully-fledged privatization in the Western sense of the word, because the government will retain a significant stake in A share companies."
Likewise, she views the listing of the major Chinese banks as transformational. "The listings are a significant step forward in the country's ongoing financial sector reform. China's banks not only need foreign capital, but also need foreign management expertise and risk management techniques.
"In the next two years, multiple high profile listings will take place in the China banking sector and the government has taken significant steps to recapitalize these banks to better attract foreign investors before the listings. Post-listing, these banks will need to improve their lending practices and reporting standards, and make loans on commercial grounds rather than being used as policy tools. There is a lot of pressure on commercial banks to reduce their non-performing loans and strengthen internal risk management before they go public."
The other major issue she sees facing China is trade tensions - another reason why she feels JPMorgan's November conference will be an important opportunity to clarify the issue. "This year China will achieve a record trade surplus and Chinese exports will continue to grow at a rate of over 30%. So it's not surprising that trade tensions are emerging with China's trading partners.
"The Chinese government has a pragmatic approach to resolving tensions with Europe and the US by conducting talks with companies in sectors such as textiles. One needs to also remember that US multinationals who have opportunities in China are also among the most obvious beneficiaries of China's exports. In the long-term, if import tariffs continue to be imposed, it will only further impact the consumer - so nobody is interested in starting a trade war."
Ulrich herself is excited about the opportunities: "As a China watcher it becomes more exciting, more dynamic and more complex every day."
