UBS puts top economist on leave over pig row in China

Bosses consider ‘further steps’ as Chinese bank cuts ties after apology for staff veteran’s remark is rejected

UBS was forced to put one of its top economists on leave yesterday due to a deepening row over a comment he made about pork in China.

Global chief economist Paul Donovan, who has worked at the Swiss bank for almost 30 years, was put on leave after making a comment about sick pigs and pork prices which was interpreted as a racist slur and sparked outrage on social media.

State-run Chinese newspaper Global Times accused the bank of using “distasteful and racist language to analyse China’s inflation”. UBS, the world’s biggest wealth manager, struggled to move on from the fallout yesterday despite apologising “unreservedly for any misunderstanding caused by these innocently intended comments” earlier in the week.

The Swiss bank announced that Mr Donovan had been put on leave while it reviews the matter “to evaluate whether further steps need to be taken” just hours after Chinese bank Haitong International pulled its relationship with the bank amid the furore.

One source said the hope is that Mr Donovan’s leave will “take the steam out of the situation” and last no longer than a month. An independent group is expected to come in to assess the comment as well as the bank’s reaction to the angry response.

“Maybe all banks need an extra layer of checks around cultural sensitivities that we might have not predicted,” the source said.

A spokesman for Haitong International said it had decided to “suspend the collaboration with UBS” but did not go into further detail. No other banks were thought to have cut ties with UBS at the time of writing.

The saga started when Mr Donovan commented during a weekly podcast that an outbreak of African swine fever that has affected herds across Asia and is increasing the price of pork “matters if you are a Chinese pig”.

“Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China,” he said.

Experts have already warned that the fever could have as big an impact on the world meat industry as mad cow disease did in the Nineties – in China herds of animals are being killed in an effort to contain the disease.

After social media users attacked Mr Donovan’s use of the phrase “Chinese pig” UBS quickly released an apology.

“To be clear, this comment was about inflation and Chinese consumer prices rising, which was driven by higher prices for pork,” a spokesman said.

However, the apology failed to quieten the row, with the Chinese Securities Association of Hong Kong stepping in to dismiss it as artificial. The organisation sent a letter to the UBS board calling it “not only insincere, but also arrogant, again hurting the feelings of Chinese people”. The association had also demanded that UBS sack Mr Donovan, who is British.

One Beijing-based worker told Global Times: “The problem is not that people do not understand what the article is about; the problem is that they chose a phrase [Chinese pig] that has clear racist connotations.”

UBS has taken down the podcast and said it was enhancing its “internal processes” to avoid any future incidents, adding: “We remain fully committed to investing in China.”

China is a major area of focus for UBS, with chief executive Sergio Ermotti planning to double staff there by 2021. In December UBS became the first foreign bank in China to win official approval to take a controlling stake in its local securities joint venture.