By Jonathan Martin
A multinational investment bank lost out on a US$1-billion deal after one of the bank’s senior economists described inflation related to China’s African swine fever (ASF) epidemic using “racist” terms.
Paul Donovan, the chief economist for UBS’s wealth-management arm, produced a podcast last Wednesday. The podcast was transcribed and posted to UBS’s website. The transcription has since been taken down.
"Chinese consumer prices rose,” he said in the podcast. “This was mainly due to sick pigs. Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China. It does not really matter to the rest of the world."
Chinese nationals saw the comments as inflammatory.
Chinese government-owned newspaper Global Times accused Donovan of using “distasteful and racist language to analyze China's inflation.”
The word pig is often used as an insult in China. Using the words “Chinese pigs” may have been seen as an insult to the Chinese people, some experts suggest.
“Those who insult China should pay the price for their misdeeds, so as to deter others from insulting China in the future,” Chinese state-owned publication China Daily said. “The Chinese people suffered such humiliations during the decades when we were still weak. Now the country is strong. We should have confidence and uphold the nation’s dignity.”
Donovan publicly apologized for the comment on Bloomberg TV, but Haitong International Securities, the Hong Kong unit of Chinese brokerage Haitong Securities Co., still decided to suspended all collaboration with UBS.
Chinese infrastructure giant CRCC said it had dropped the Swiss banking giant from a US$1-billion bond deal Monday but did not give a reason.
The decision was made because of the controversy over the pig comment, Reuters reports.
Donovan has been put on leave while UBS evaluates if it should take further steps, a company release says.