(The Center Square) – In a hearing Wednesday of the U.S. House Financial Services Committee, bankers faltered in responding to questions on the morality of doing business with China.
U.S. Rep. Blaine Luetkemeyer, R-Mo., brought to the bankers’ attention the U.S. State Department’s 2021 report accusing China of committing various human rights violations, including acts of genocide and crimes against humanity, and asked if they would condemn these actions.
“Mr. Moynihan, do you condemn the Chinese Communist Party for those horrible acts that they regularly carry out,” Luetkemeyer said.
Bank of America’s CEO, Brian Moynihan said that he does not see the company as doing business with the Chinese government but with individual companies within China.
“When we look at what we do in a country, its individual clients, it’s not a theoretical concept,” Moynihan said. “We don’t do business with companies that we believe are doing atrocities or something like that; you are asking a hypothetical question.”
When asked the same question, the CEO of Citigroup, Jane Fraser, acknowledged that the company works with the Chinese government but says the company takes accusations of human rights abuses seriously.
“Similar to Mr. Moynihan, we do not do any activity with companies that involve forced labor or the like,” Fraser said. “We do do business with the Chinese government.”
Luetkemeyer pointed out that each bank had a public statement pledging their support and protection of human rights, and yet they continue to do business with the Chinese Communist party.
He then moved on to asking the bankers whether an attempted invasion of Taiwan would force the bankers to stop doing business in China.
“In recent months, China has continually threatened our ally Taiwan with military exercises and violent rhetoric,” Luetkemeyer said. “Should the CCP follow through on its threat to invade Taiwan, are your banks prepared to pull your investments out of China?”
In response, each banker said they would rely on the government’s guidance to decide what to do next.
“We would follow the government guidance on that,” Fraser said. “We very much hope that doesn’t happen.”
Luetkemeyer offered some pushback, saying that banks have made decisions based on morals that go well beyond U.S. law.
“In 2018, Citi and Bank of America announced lending restrictions to certain gun manufacturers and retailers,” Luetkemeyer said. “In 2019, JP Morgan publicly announced they will not fund private prisons. None of these decisions were made because of a law passed by Congress.”
He then asked the CEO of JP Morgan Chase & Co., Jamie Dimon, if the company would stop doing business in China if it attempted to invade Taiwan.
Dimon said that, again, he would rely on the government’s guidance.
“We’ll have to decide when that happens,” Dimon said. “The first thing I would do is call the American government and ask for guidance.”
Luetkemeyer then asked what the bankers would do in the absence of governmental guidance. Fraser said Citigroup would likely remove its assets from China in such an event.
“It’s a hypothetical question, but it is highly likely that we would have a reduced presence,” Frasier said.