Lost in translation: Has a comment on pigs cost UBS a bond deal?

News and opinion on finance

An extraordinary series of events during the past five days has underlined a universal truism: a lot can be lost in translation. And another, too: annoying China has consequences.

The story starts with a podcast by Paul Donovan, chief economist at UBS global wealth management, on Wednesday. He was speaking about the impact of African swine fever in China, and the knock-on effects on consumer prices.

This is what he said: “Chinese consumer prices rose. This was mainly due to sick pigs.

“Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China. It does not really matter to the rest of the world.”

If that doesn’t sound much, consider that, five days later, Donovan has been placed on leave of absence, UBS has unreservedly apologized, and it is understood it has been thrown off a joint bookrunner role on a dollar bond deal for a powerful Chinese state-owned corporate, China Railway.

At the heart of the issue appears to be a belief among some Chinese that “it matters if you are a Chinese pig” refers to Chinese people, rather than pigs.

That particular expression is, to Chinese speakers, loaded with racial connotation. Chinese social media has run amok with this interpretation, which has led to many people calling for Donovan to be fired.

Lin Yong, Haitong
International Securities

Outrage on social media is nothing new, except for the fact that some very senior people have taken up the call. One is Lin Yong, who is chief executive of Haitong International Securities in Hong Kong, and also the head of the Chinese Securities Association of Hong Kong.

The association called on UBS to fire Donovan, saying in a statement on Friday that UBS should “take measures to eliminate negative effects, effectively strengthen the management and compliance review of the publication of research reports, [and] eliminate the occurrence of similar issues”.

Then, Haitong International said it had severed ties with UBS. This morning the securities house told Euromoney in a statement: “Haitong International has currently suspended the collaboration with UBS.”

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Others have also waded in.

Hao Hong, head of research at Bank of Communications International in Hong Kong, tweeted last week about “racist” language, then followed up on Saturday with an explanation of his objection.

“In any culture, ‘pig’ is a derogatory term,” he wrote. “And the report attached nationality to such a term, in a sentence that served no purpose in this research report.

“One shouldn’t make culturally insensitive jokes… You don’t need to be a native speaker to understand the derogatory connection between the word pig and a culture.”

Hong has a powerful reputation in Hong Kong. In 2017, he was named best economist in the Asiamoney brokers poll for Hong Kong, winning 13.51% of the vote. He is noted for his accurate predictions of China’s booms and busts.

Damage limitation

UBS, which has a crucial securities joint venture in Beijing as well as widespread other operations involving the mainland, swiftly went into damage-limitation mode.

“We apologize unreservedly for any pain caused by these innocently intended comments by Paul Donovan,” it said in a statement, saying it had removed the audio comment from circulation.

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

UBS also confirmed it has asked Donovan to take a leave of absence “as we review this matter, to evaluate whether further steps need to be taken”.

Donovan issued an apology of his own.

It [Chinese pig] has always been viewed as a phrase of racism, which also came up in many TV series and Hollywood movies

– Chinese securities house employee

However, over the weekend, it appeared that the furore had started to impact business.

Before the weekend, UBS was listed as a joint bookrunner on a dollar bond for China Railway. By Monday morning, it was no longer on the trade.

“We have no comment on the status of the China Railway dollar bond,” a spokesman told Euromoney on Monday.

Rival banks, having observed the row with the usual industry schadenfreude last week, are now looking on with some disbelief. “No issue at all,” says one. “Massive over-reaction.”


However, the depth of reaction among native Chinese speakers, even those in the financial services industry in Hong Kong who would surely have understood the intention, demonstrates that westerners clearly don’t understand just how derogatory references to pigs are to Chinese.

The term goes all the way back to 19th-century opium wars between China and the west.

“It [Chinese pig] has always been viewed as a phrase of racism, which also came up in many TV series and Hollywood movies,” one person at a Chinese securities house explained to Euromoney. A recent example was the movie The Big Short, she said.

She also pointed to an accusation that the term was used against a Chinese passenger on a Virgin Atlantic flight, a story that gathered considerable attention in China and Hong Kong after the alleged victim posted her account of the situation on Weibo, the Chinese social media platform.

It would, of course, be madness in the extreme for a UBS economist to have intentionally referred to Chinese people as pigs. And it is hard to talk about swine flu without talking about the swine.

However, the incident serves as a reminder of just how quickly things can snowball, even if based on a misunderstanding, and that there are genuine financial consequences when it happens.

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