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Shanghai Bankers Head for Exits After Covid Lockdown Ordeal

An exodus will hurt Shanghai’s ambition to be a regional financial centre and could be bad news for foreign firms that expanded operations in the city over the past few years

Workers in protective suits keep watch on a street during the Shanghai lockdown, April 16, 2022. But the experience has shaken many finance professionals, who now want to get out, when the lockdown finally ends. Photo: Aly Song, Reuters.


Shanghai’s Covid lockdown ordeal could have a significant impact on the city’s financial sector, as many bankers, traders and investors are now looking to shift to Hong Kong or other centres outside the country.

April 2022 has been a bitter experience for many foreign and local business people, who were confined in their homes for three to four weeks, with some struggling to even get food and supplies for their families.

The four-week-long lockdown, which saw most of the city’s 26 million people stuck indoors, has also started to weigh on prospective financial deals with some transactions being put on hold due to logistical challenges, industry executives said.

“What happened in Shanghai is shocking to most of the people. Few would have imagined things will get out of hand to such an extent,” Melvyn Xu, a private equity investor who moved to Shanghai from Hong Kong in late 2020, said.

Xu is now waiting for cross-border movement restrictions to be relaxed so that travel becomes easier between the mainland and Hong Kong, and is considering sending his children back to local schools in Hong Kong, while paring his ties to Shanghai “as a ground for work only.”

“I think the biggest frustration is you cannot do anything about it [lockdown], which is particularly upsetting,” he said. “For people living here, you’ve got utterly zero bargaining power.”


Exodus Could Hit City’s Ambitions

An exodus will hurt Shanghai‘s ambition to be a regional financial centre and bring bad news for foreign investment banks, insurers and asset and wealth managers who have been expanding their footprints in the city over the past few years as China opened up its financial sector.

Goldman Sachs is looking to add close to 10 jobs in Shanghai, a WeChat post showed. JPMorgan is beefing up its Shanghai unit after taking full ownership last year, while BlackRock is adding around 20 to its headcount in its Shanghai fund unit.

The industry’s growth moves resulted in many bankers, traders and fund managers moving from Hong Kong and other centres to Shanghai to be closer to their clients and gain expertise in working in new areas and on large transactions.

Those dreams now appear to be in peril.

“Once this lockdown is over, expats across all industries will negotiate a new career outside of China,” said Jason Tan, Shanghai-based director specialising in wealth and fintech at headhunter REForce group.

Conversations with financial professionals in Shanghai have shown deep concerns about the lockdown measures, Tan said. “[It’s] not very attractive moving forward … This lockdown can happen again. Next time it might be longer and tighter.”


Due-Diligence Challenge

Work-wise, the biggest challenge for bankers in Shanghai is that they cannot conduct on-site due-diligence on their clients that are planning to go public or exploring M&A opportunities.

“We have to go to their factories, plants to verify things. It’s impossible to get the due-diligence done virtually,” said a senior investment banker with a European bank, who has been working in Shanghai on a temporary basis since February.

A senior portfolio manager based in Shanghai said that the lockdown has changed the business environment of the city “profoundly – at least in the short term.”

Shanghai is a financial and industrial centre of China which operates like a machine” but almost no adjustments had been made to maintain its operation even after citizens posted complaints on social media, the portfolio manager said.

Both the investment banker and the portfolio manager declined to be named due to the sensitivity of the issue.


• Reuters with additional editing by Jim Pollard



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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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