The US’s Securities and Exchange Commission investigates investment bank JP Morgan under the country’s laws against overseas corrupt practices. These laws are not so much tough as almost impossible-to-obey for American players in some industries in some parts of the world, where nothing gets done without throwing a bit of tea money around. But in this case the suspected ‘bribery’ is no more than plain, good old-fashioned, honest, perfectly innocent, above-board, Confucio-Communist nepotistic groveling. JP Morgan may or may not be the archetypal blood-sucking parasite vermin vampire that destroyed Western civilization’s financial base in 2007, but – for those of us looking on from Asia – it should in this instance hold its head up high, look the SEC in the face and state: no case to answer.
If you’re not allowed to hire the daughter of a corrupt senior Chinese rail official and the son of a top banking regulator-turned financier, what on earth can you do? Anyone in JP Morgan’s position would – indeed does – employ the offspring of China’s hereditary state-capitalist elite. They make wonderful ornaments, guaranteed to impress at cocktail parties. They can open doors, or at least give outsiders the impression that doors can be opened. They can be discreet conduits for or sources of information (or give the impression, etc). And they can lend a sort of hard-to-define presence, something between gravitas and clout, suitable for attracting or intimidating as necessary. Not least, the very act of hiring princelings can please their powerful daddies, which the SEC won’t let you do anymore in simpler, more traditional ways. And finally there’s that inescapable nagging threat always hanging over you in the milieu of the shoe-shining culture: what will happen to us if we don’t?
The SEC presumably has no idea that we are talking about China, a country where trillions in money and assets slosh around a half-hidden no-man’s land between public and private sectors, and one official’s word can mean the difference between winning a multibillion-dollar deal and being chained up in a dungeon and tortured. Those who live by the shoe-shine, die by the shoe-shine. They usually deserve it, but in this case the accused is arguably a victim. It’s a funny world: while the Chinese state persecutes foreign companies on selective, trumped-up, protectionist-driven antitrust grounds – not to mention grabbing distant countries’ 200-mile maritime limits, and all the rest – the US authorities bludgeon their own into the ground for following the essential ‘When in Rome’ rule. The only silver lining on this gloomy cloud is that it gives foreign correspondents a perfect opportunity to use their favourite (OK, only) Chinese word, ‘guanxi’.