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June 18, 2019updated 19 Jun 2019 10:40am

UBS loses $1bn bond deal in China over chief economist “pig” comment

By Jamie Crawley

UBS has lost its role in a $1bn bond deal in China, four days after a furore was sparked by a comment from chief economist Paul Donovan.

Paul Donovan’s daily podcast prompted a visceral reaction last Wednesday, when he made a droll observation of the effects of price inflation on the wider economy.

Speaking of a rise in Chinese consumer price attributable to an outbreak of swine fever, Paul Donovan said: “Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China.”

This was prompted a multitude of social media responses by listeners in China, who interpreted the comment as a racial slur.

Haitong International Securities in Hong Kong cut business relations with UBS while the Chinese Securities Association demanded Paul Donovan to be sacked.

This has been followed today by the news that UBS has lost its role in a $1bn bond deal for China Railway Construction Corp.

Paul Donovan has subsequently been sent on leave by UBS, after offering a profuse apology in Thursday’s episode and confirming that the episode containing the offending comment had been deleted.

UBS vs China – Donovan comments lost in translation?

The podcasts recorded by Paul Donovan every morning are generally littered with wry observations about the economic and political world.

Donovan often sardonically suggests that a Donald Trump tweet carries greater significance than a statement from the Fed, and precedes all Brexit discussion with the prefix “interminably tedious”.

Commentators will suggest that Paul Donovan has been sold short by his employers, with UBS kowtowing to pressure from China over concern to protect its business in the world’s second largest economy.

While such a consideration is completely understandable, it is reasonable to argue that the comment was innocently made and its subsequent backlash the result of a simple misinterpretation.

University of Hong Kong linguistics professor, Stephen Matthews, told the FT that the interpreting of Donovan’s comment as a racial slur was most likely the result of a mistranslation or misreading.

“The perceived insult is derived either from a misreading of the English text by a non-native speaker, or from a poor Chinese translation.

“Either way, the author is not at fault.”


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