West has ‘good hand in China economic battlefield but it doesn’t have to be war’
The boss of the world’s biggest bank has told Sky News that Western economies have a “good hand” in the “economic battlefield” with China but declared it does not have to be war.
In a wide-ranging interview with Sky’s Wilfred Frost, chief executive and chairman of JPMorgan Chase Jamie Dimon said the West was going to have a “hard time” as long as China had close ties with Russia.
But he said it was well placed due to the resilience of their collective economies and long-standing partnerships, such as NATO.
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However, he warned of the dangers of fragmentation since Donald Trump, when US president, pulled out of the Trans-Pacific Partnership in 2017.
He also said that Joe Biden’s administration should have worked with allies over the effects of his Inflation Reduction Act.
The massive programme of incentives to bolster the green economy had the effect of taking investment out of Europe at a time when Russia’s war in Ukraine was dominating the agenda.
The bank boss warned too of a backlash from China over US tariffs against its electric cars and solar panels announced just this week, arguing that a joint approach from western powers over China more generally would carry more weight.
Mr Dimon, who has run JPMorgan since 2005 and is widely seen as the most influential boss of a financial services company in the United States, said: “We have competition with China.
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Why is the US taking aim at China?
“I think the American government is doing the right thing to fully engage. That doesn’t mean the Chinese are going to like everything we do just like we don’t like everything they do but it doesn’t have to be war, it can be tough competition and we should be prepared for that.”
“The most important thing”, he added, “is that we do it together”.
“They’re not an enemy, you know, but they’re competing. They want a different world than we want. And I think they want a different world than we want in the Western world… it’s worth fighting for.”
“We all made a little bit of mistake in how we kind of expected them after WTO (World Trade Organisation) to become more Western and things like that. It’s okay. Don’t cry over spilled milk,” he concluded.
Mr Dimon was speaking 24 hours after the US-based bank, which has 22,000 staff and a 200-year history in the UK market, announced £40m in new investments to help connect young people and underserved communities to economic opportunities.
They followed the opening of a new tech centre in Glasgow.
JPMorgan Chase – perhaps best-known in this country for its Chase retail division – is the biggest bank in the world by market value with a capitalisation of almost $600bn (£475bn).
Mr Dimon, who was initially critical of Brexit following the UK’s split from the EU, spoke of the bank’s continuing commitment to the country having called the future of its UK operations into question in 2021.
Asked about the looming election, he said that talks with Rishi Sunak and Sir Keir Starmer had left him in no doubt that both the Conservatives and Labour were “pro business”.
He described how growing economies benefits everybody as it allows for investment.
“Everybody I heard… Conservative and Labour, (is) talking about growing the economy, technology, research and developments, simplifying regulations, making it easier for people to start businesses and grow businesses, making sure schools educate… those policies work,” he said.
Around 1.3 million people on low wages are to secure guaranteed sick pay for the first time in a bid to boost health and living standards, the government has announced.
Those earning less than £123 a week on average will be entitled to a sick pay equivalent of 80% of their weekly salary or the new rate of statutory sick pay (SSP) – due to rise to £118.75 per week in April.
Employers will have to pay whatever the lowest sum is under a compromise achieved following discussions with business leaders – already reeling from a looming hike to minimum wage and employer national insurance contributions announced in October’s budget.
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The new sick pay policy is expected to take effect next year but, crucially, it will apply from the first day of sickness rather than after the third consecutive day.
The government argues that the measure will keep more people off benefits and leave some up to £100 better off per week because they will remain in employment.
Work and Pensions Secretary Liz Kendall said: “For too long, sick workers have had to decide between staying at home and losing a day’s pay, or soldiering on at their own risk just to make ends meet.
“No one should ever have to choose between their health and earning a living, which is why we are making this landmark change.
“The new rate is good for workers and fair on businesses as part of our plan to boost rights and make work pay, while delivering our plan for change.”
Unions had argued for an even higher figure.
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The British Chambers of Commerce welcomed the outcome of the talks but said its members were still set to face further additional costs arising from the policy shift – on top of the budget measures due to take effect this April.
Jane Gratton, its deputy director of public policy, said: “Employers often struggle to find shift cover at short notice, leading to disruption for customers.
“The government’s impact assessment did not produce compelling evidence on the day-one rights issue, so there may yet be unforeseen consequences.”
The announcement was made as MPs debate the wider employment rights Bill amid reports the government could drop its commitment to a ‘right to switch off’ outside of working hours.
The Sunday Times also reported at the weekend that a series of amendments was likely to be tabled by ministers as part of government efforts to keep business sweet following a brutal backlash to the budget.
Business groups have argued that the £25bn annual hit from the employment tax measures will result in job cuts, poor pay awards and weaker investment – hitting the government’s growth agenda.
Rachel Suff, wellbeing adviser at the HR body CIPD, said of the additional sick pay plans: “Phasing in elements of the Employment Rights Bill and ensuring sufficient support and guidance for employers will be vital to making sure these measures work for employers and employees.”
Weapons companies’ share prices surged across Europe and the UK’s benchmark stock index reached a record high amid talks of increased defence spending.
The FTSE 100 index of the most valuable companies on the London Stock Exchange hit a level never seen before as arms maker BAE Systems saw its share price rise as much as 17.5% on Monday to its record high.
That share price rise added about £5.92bn to the company’s total value on Monday from the close on Friday afternoon.
Also boosting the FTSE 100 to a never-before-seen level was defence and aerospace firm Rolls-Royce Holdings whose stocks rose 6% at one point on Monday.
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Elsewhere on the London Stock Exchange, the bigger FTSE 250 index comprising more British companies was also raised by the anticipated growth in weapons spending.
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The Ukraine summit: How the day unfolded
Its biggest risers were defence technology company QinetiQ and defence support business Babcock International, which climbed 10.3% and 9.3% respectively.
It was not just British arms businesses given a lift, across Europe stocks in such companies were on the up.
A Europe-wide phenomenon
Shares of Germany’s largest defence company Rheinmetall jumped 18% while Italy’s Leonardo was up 15%.
Expectations of more defence spending rose after European leaders got together in London to discuss greater funding for Ukraine in its fight against Russia and a possible EU-backed peace deal.
Why?
Prime Minister Sir Keir Starmer announced on Sunday a loan to Ukraine and a £1.6bn deal for a Belfast factory to supply missiles for the country’s fight against Russia.
Mr Starmer had suggested a coalition of European and other allies could defend a potential deal for Ukraine to “guarantee the peace” and increase military spending to do so.
He made the comments at a summit of EU leaders, along with Canada and Turkey, which had been planned for more than a week but took on urgency following the disastrous meeting and diplomatic breakdown between President Donald Trump and Volodymyr Zelenskyy at the White House on Friday.
The UK had already announced it would increase military spending to 2.5% of GDP – a measure of everything produced in the economy – by 2027.
Chancellor Rachel Reeves had also announced an extra £2.26bn for the Ukrainian war effort, funded by the profits made from hundreds of billions of dollars worth of Russian sovereign assets frozen since the start of the full-scale war in February 2022.
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