BEIJING: Western companies have learned an expensive lesson on pigs, China and their emotions this week.
For financial professionals around the world, rising trade tensions and fears of a slowdown were no match for an unlikely drama Suddenly in China: The UBS Group's fight to suppress a public uproar over the jokes about the pork prices of a respected economist.
The debate on desks and stock exchanges swirled in banks and investment firms. Many were stunned by the indignation.
Was the uproar in China – compounded by outraged state media and the demand of a local industrial group following the dismissal of the economist – a sort of new front in the trade war? And what exactly was the insult?
Controversial was an attempt by Paul Donovan, the global chief economist of UBS, to consider whether a swine flu epidemic in China should worry investors concerned with global inflation: "It's important if you're a Chinese pig "He wrote about the disease. "It's important to eat pork in China. It does not matter to the rest of the world.
This particular formulation was, as it turned out, a perfect storm of grammar and choice of words ̵
Jasmine Fan, a strategist at BlackRock in New York, who grew up in China and speaks both Mandarin and English, repeated other bilingual industry professionals who understood and tried to explain the problem.
"I think there is no problem in the English context, but it sounds pretty bad reading the Chinese translation," she said. For starters, the phrase "if you are" is fairly common in English, but relatively rare in Chinese, where it is understood more as a personal reference to the listener.
Another problem was Donovan's undiplomatic combination of "Chinese pig".
"When traders refer to pigs, they usually use the word" pig "instead. "Said Victor Shih, an adjunct professor at the University of California in San Diego. "Pig" is often used derogatory.
Local UBS rivals, who have tried to wrest business from more established Western asset managers, denounced Donovan's comments quickly. Hong Kong's Chinese Securities Association, which represented financial institutions, including local branches of mainland companies, called for layoffs.
"Almost everyone in the Chinese financial community was offended by this tasteless comment," said Hao Hong, chief research and chief strategist at Bocom International Holdings Co, in a post on his WeChat account on Friday.
UBS asked Donovan to take a vacation, took a record of his comments, and issued a statement saying, "We apologize without reservation for any misunderstandings that may have been caused by innocent comments. "
But this frustrated many English-speaking people across Europe and the US who had difficulty understanding the backlash. Many said that the reaction in China was clearly exaggerated. Some expressed their sympathy to Donovan and said they were disappointed. His Zurich based employer did not defend him more. They asked not to be identified because the situation was so sensitive.
Bill Bishop, who writes the Sinocism newsletter on current Chinese affairs, doubted that the incident had been "manufactured" by the authorities. Instead, it's a reminder that global companies that want to expand in China must always be careful or risk punishment.
Chinese state media were also present quickly.
"Whether Donovan was fired or not is still unknown, but those who insult the Chinese must pay the price," said the People's Daily in a commentary released late Friday.
"Otherwise, relapses will be inevitable and potential offenders will be incentivized to do the same. "
In December last year, UBS became the first foreign bank in China to receive official approval to acquire a controlling interest in its local securities joint venture. UBS has announced that it will improve its "internal processes" to avoid a recurrence of such an event and remains "fully committed to investing in China".
The Swiss Bank is not the first to deal with cultural issues in China.  Last year, the Italian luxury brand Dolce & Gabbana caused a stir after one of their ads featured a model of East Asian descent who had difficulty eating pizza with chopsticks.
"Whenever Chinese nationals respond to insults from foreigners, some people quickly responded by criticizing the Chinese for having" hearts of glass, "wrote the People's Daily .
"Even some compatriots believe that any Chinese retaliation is like a mountain from a molehill. But it is a big deal, and there can be no ambiguity about it. "