Fed up with COVID lockdown, bankers and fund managers seek to leave Shanghai

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Workers in protective gear guard a street during a lockdown, amid the coronavirus disease (COVID-19) pandemic, in Shanghai, China April 16, 2022. REUTERS/Aly Song

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HONG KONG, April 26 (Reuters) – Financial industry professionals in Shanghai are preparing to return to Hong Kong and other offshore hubs after spending only a few years in the Chinese city as a severe COVID-19 lockdown 19 has harmed their business prospects and disrupted daily life.

Thousands of bankers, traders and investors in the financial hub of the world’s second-largest economy have found themselves confined to their homes, some even struggling to secure food and other essentials for their families.

The four-week lockdown, which has forced most of the city’s 26 million people indoors, has started to weigh on potential financial deals, with some deals put on hold due to logistical issues, executives from the city said. industry.

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“What happened in Shanghai is shocking to most people. Few people would have imagined that things would spiral out of control to such an extent,” said Melvyn Xu, a private equity investor who moved to Shanghai from Hong Kong. Kong at the end of 2020.

Xu is now waiting for cross-border movement restrictions to be eased so that travel becomes easier between the mainland and Hong Kong, and plans to send her children back to local schools in Hong Kong, while reducing her ties with Shanghai “as a reason for work only”.

“I think the biggest frustration is that there’s nothing you can do about it (lockdown), which is particularly upsetting,” he said. “For the people who live here, you have no bargaining power.”

An exodus will hurt Shanghai’s ambition to be a regional financial center and bring bad news to foreign investment banks, insurers and asset and wealth managers who have expanded their footprint in the city over the past few years. years as China opened up its financial sector.

Goldman Sachs (GS.N) is looking to create nearly 50 jobs in Shanghai, according to a WeChat report. JPMorgan (JPM.N) is bolstering its Shanghai unit after taking full ownership last year, while BlackRock (BLK.N) is adding around 20 staff to its Shanghai fund unit.

Industry growth movements have led many bankers, traders and fund managers to relocate from Hong Kong and other centers to Shanghai to be closer to their clients and gain expertise in working in new areas and on large transactions.

Those dreams now seem in jeopardy.

“Once this lockdown is over, expats from all sectors will negotiate new careers outside of China,” said Jason Tan, a Shanghai-based director specializing in wealth, buyside and fintech at the hunter group. REForce heads.

Conversations with finance professionals in Shanghai showed deep concerns about the lockdown measures, Tan said. “(It’s) not very attractive going forward… This lockdown can happen again. Next time it might be longer and tighter.”

Professionally, the biggest challenge for Shanghai bankers is that they cannot perform on-site due diligence on clients who are considering going public or exploring M&A opportunities.

“We have to go to their factories, their factories to check things out. It’s impossible to do due diligence virtually,” said a senior investment banker at a European bank, who has been working in Shanghai on a temporary basis since February. .

A Shanghai-based senior portfolio manager said the lockdown had “profoundly, at least in the short term” changed the city’s business environment.

“Shanghai is a financial and industrial hub of China that runs like a machine,” but almost no adjustments have been made to keep it running even after citizens filed complaints on social media, the manager said. wallet.

The investment banker and portfolio manager declined to be named due to the sensitivity of the issue.

(This story corrects number of jobs Goldman seeks to add in 8th paragraph)

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Reporting by Julie Zhu, Xie Yu and Selena Li; Editing by Sumeet Chatterjee and Muralikumar Anantharaman

Our standards: The Thomson Reuters Trust Principles.

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