Four and a half years ago Ian Gordon, a banking analyst at Investec, was ticked off for writing a punchy research note about the regulatory pressures on Standard Chartered, and titling it “I can’t breathe”. Mr Gordon’s headline, as critics soon pointed out, drew a crass comparison between a bank’s relations with its regulators and the resonant dying words of Eric Garner, an unarmed black man who was killed in a police chokehold a few months earlier.
A brief Twitter storm ensued. Leading regulator Benjamin Lawsky tweeted: “Terrible. Should be disavowed with apologies by Investec.” The bank duly did just that. Mr Gordon was told not to speak to the media for a while. And soon everything calmed down.
There is an obvious parallel with the row that blew up in China last week over the publication by a London-based UBS economist of a gently comic take on the country’s consumer inflation numbers and why swine flu was to blame.
“Chinese consumer prices rose. This was mainly due to sick pigs,” Paul Donovan said in a podcast and note to clients. “Does this matter? It matters if you are a Chinese pig.” The wry comment was picked up, mistranslated and taken to be a racial slur in a flurry of critical social media posts.
By Friday, Haitong International Securities in Hong Kong had severed relations with UBS, and the Chinese Securities Association of Hong Kong, which shares a boss with Haitong, was demanding Mr Donovan be sacked.
UBS promptly put Mr Donovan on a leave of absence as chief economist at UBS Global Wealth Management, having already apologised unreservedly for the remarks, and deleted them.
A generous interpretation of the Chinese misreading of Mr Donovan’s comments – one that a repentant UBS seems willing to accept – is that it is grounded in the offensive nature of the Mandarin for “Chinese pig”. The term carries associations with the 19th century opium wars when the British suppressed the locals and called them pigs, one insider told me.
That may be. And cultural sensitivity is important for any multinational. But it is an absurdity to translate an innocent English phrase in a certain way and then take offence at it. Mr Donovan’s original remark was merely a factual explanation of what has caused inflation – swine flu – followed by a droll aside that inflation more generally was not a problem and therefore that only pigs, because of the risk of flu, need worry. The explanation rather kills the witticism.
Mr Donovan can feel rightly sore about his enforced leave of absence, though if UBS continues to kowtow, and accedes to demands to convert suspension into sacking, it will be another level of injustice.
There are multiple explanations for the misunderstanding, some of which may well be deliberate.
First, amid the escalating China-US trade war, there has been a broader heightening of tensions with the west. A London-based British economist at a European bank, writing about China, almost invites a jingoistic response.
Second, there is good reason for a competitor of UBS like Haitong to bad-mouth it, especially as the Swiss bank has recently secured the right to majority own its Chinese securities joint venture.
Third, it was another competitor, Bank of Communications International, the state-run Chinese bank’s Hong Kong unit – and its head of research Hao Hong – that helped amplify the furore by tweeting that Mr Donovan had used “distasteful and racist language”. But Mr Hong’s own account of events appears disingenuous. On Friday – a day after he was contacted by the FT and replied to an inquiry about his original tweet – he wrote on social media that “no one from FT ever reached out to me for explanation”.
UBS is naturally keen to protect its business in China. In response to similar instances in the past, western banks have acted decisively – or brutally, depending on your point of view. In 2006 Morgan Stanley parted company with respected economist Andy Xie, after he made critical comments about Singapore which were leaked to the authorities.
UBS cannot go down the same path. Mr Donovan is highly rated, has had a 26-year career at the bank and has done nothing wrong. His employer must stand by him and resist a misguided bullying campaign stoked by social media and mistranslation.