Why did UBS decide to increase its headcount in China?
The decision was a natural evolution of our business in Asia. We have been present in the region for more than 50 years. We are aiming to grow our business in China to the next level, which is in line with our expectation for China to grow.
China is a big contributor to our regional profitability and the region is a big contributor to the global group.
If you put 4 or 5 percent of growth on China for the next 10 to 15 years, you are creating another China. It is difficult to think of any other country or region that has such prospect for growth.
It is very interesting that our competitors have been trying to build up capabilities in Asia in good time.
But the reality that we are seeing right now is very difficult to penetrate. It is not that you physically become a wealth manager by announcing that you have the aspiration.
It took more than 150 years for UBS to develop its franchise and a DNA of this magnitude.
We are clearly not complacent about our competitive dynamics. When we look at our own capabilities and the opportunities that we see in China, we are very confident.
While being upbeat about China in the long run, what do you think are the short-term risks?
If you look at the reaction of the global markets to China's adjustment, (I call it an adjustment because after so many years of growth, what we see today is a very normal consolidation and reposition of the economy), the fact is if China has a cold, the world has a flu.
It is not just a China problem.
When I look at 2016, I think it will be a big year of adjustment. Maybe the next couple of years are going to be more challenging. That is the reason why I think we should focus on the long-term prospect.
What do you think about the policy uncertainties of China and the Chinese regulator's capability to manage the market?
We need to accept that the recent market volatility is the adjustment of an anomaly. All the measures that are taken at the regulatory and government level to go through this process will likely involve some degree of an experiment.
In a crisis, you took actions to mitigate some issues but it may create collateral damages.
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