\n
![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/04\/GettyImages-1835356272-e1712584526480.jpg?w=2048\")
<\/p>\n [ad_1]
\n<\/p>\n
Jamie Dimon used his annual shareholder letter<\/a> from JPMorgan Chase<\/a> to highlight America\u2019s need to engage with China, a nation he says has established itself as a \u201cpotential superpower\u201d with the influence to rival that of the U.S.<\/p>\n However, the self-professed \u201cfull-throated, red-blooded, patriotic, unwoke, capitalist CEO\u201d<\/a> said while collaboration between the two countries is key, it\u2019s his home nation that should be setting the global political and economic agenda<\/a>. <\/p>\n In his letter to shareholders released Monday, the leader of America\u2019s biggest bank<\/a> wrote geopolitical tensions<\/a> were high up his list of concerns. <\/p>\n Government and business in the Western world \u201cessentially underestimated the growing strength<\/a> and potential threat of China,\u201d Dimon added, saying the communist nation has been \u201ccomprehensively and strategically focused\u201d on its economic national security<\/a> while the West \u201cslept.\u201d<\/p>\n \u201cOver the last 20 years, China has been executing a more comprehensive economic strategy than we have,\u201d Dimon added. \u201cThe country\u2019s leaders have successfully grown their nation and, depending on how you measure it, have the first or second largest economy in the world. <\/p>\n \u201cThat said, many question the current economic focus of China\u2019s leadership as they don\u2019t have everything figured out.\u201d<\/p>\n China has indeed got its own set of problems. <\/p>\n It\u2019s experiencing a property crisis<\/a> after the country\u2019s largest developer Evergrande, once\u00a0worth $50 billion<\/a>, is now trading its debt at less than one cent on the dollar<\/a> after a near-total collapse. <\/p>\n The Chinese government has washed its hands of the issue, even if it means apartment buildings being left unfinished and jobs lost. <\/p>\n Meanwhile, youth unemployment is at record highs<\/a> while price-conscious consumers<\/a> are forcing investment away from more premium brands towards cheaper alternatives. <\/p>\n That being said, Dimon identified three ways that the U.S. had overlooked its increasing dependency on China<\/a> and thus handed it a level of control. <\/p>\n Dimon, who was paid a record $36 million for his work in 2023<\/a>, said: \u201cThe first is companies\u2019 overreliance on China as the sole link in their supply chain, which can create vulnerabilities and reduces resilience.\u201d<\/p>\n Often this reliance is on consumer goods and sneakers, which the Harvard Business School alumni writes is not \u201ccritical or complex\u201d and will \u201ceventually be sorted out.\u201d<\/a><\/p>\n What poses a bigger threat is the U.S.\u2019s dependency on China for its own national security, which Dimon writes is the \u201cmost critical\u201d aspect of the problem. <\/p>\n \u201cThe United States cannot rely on any potential adversaries for materials essential to our national security,\u201d he explained. <\/p>\n \u201cThink rare earths, 5G and semiconductors<\/a>, penicillin and materials critical to essential pharmaceuticals, among others. We also cannot be sharing vital technologies that can enhance an adversary\u2019s military capabilities.\u201d<\/p>\n The third is ensuring America stays at the forefront of key industries like EVs<\/a>, AI and renewable energy, he wrote: \u201cWe cannot cede our important resources and capabilities to potential adversaries.\u201d<\/p>\n The 68-year-old may have identified several ways the U.S. has inadvertently handed power to China<\/a>, but he insisted America still has \u201can enormously strong hand.\u201d<\/p>\n This is courtesy of \u201cplenty of food, water and energy; peaceful neighbors; and what remains the most prosperous and dynamic economy<\/a> the world has ever seen, with a per person GDP of over $80,000 a year,\u201d he explained. \u201cMost important, our nation is blessed with the benefit of true freedom and liberty.\u201d<\/p>\n Because of its size, the U.S. will need to maintain a relationship with China, on account of its own prosperity and that of other nations, Dimon writes. <\/p>\n Dimon\u2019s strategy moving forward is not to bemoan China\u2019s influence, but to deal with the current situation. \u201cLet\u2019s not cry over spilled milk\u2014let\u2019s just fix it,\u201d he wrote.<\/p>\n \u201cWe need to build and execute our own long-term, comprehensive economic security strategy to keep our position safe and secure,\u201d he added. \u201cI believe that respectful, strong and consistent engagement would be best for both our countries and the rest of the world.\u201d<\/p>\n<\/div>\n\nBe tough, but engage<\/h2>\n
Subscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up<\/a> for free.<\/div>\n