How JPMorgan, Bank of America are cashing in on China Inc. — despite pressure from US lawmakers

Core Viewpoint - The CEOs of JPMorgan and Bank of America are resisting pressure from US lawmakers to withdraw from underwriting a $4 billion IPO for CATL, a China-based electric car battery company, which is alleged to have ties to the Chinese military [1][4][7]. Group 1: Company Overview - CATL is recognized as the world's leading manufacturer of electric batteries, but some lawmakers suspect it serves as a front for Chinese military expansionism, a claim that the company denies [2][9]. - The company is set to list its shares on the Hong Kong stock market, with JPMorgan and Bank of America acting as lead underwriters, potentially earning a significant portion of the$240 million in underwriting fees [6][10]. Group 2: Legislative Concerns - The House Select Committee on China has expressed concerns that the banks are prioritizing profits over national security by supporting a company linked to the Chinese military, as designated by the US Department of Defense [7][9]. - The committee has requested explanations from the banks regarding their decision to proceed with the underwriting, but has not yet received a response [5][6]. Group 3: Company Defense - CATL has publicly stated that it has never engaged in military-related activities and is in the process of clarifying its status with the Department of Defense [12]. - The company argues that the allegations against it are factually incorrect and emphasizes that its primary business is in electric car batteries used by many US companies [10][12]. Group 4: Broader Context - The situation unfolds amid heightened scrutiny of Chinese companies operating in the US, with lawmakers calling for investigations into compliance with US disclosure laws [16][18]. - The ongoing trade tensions between the US and China add complexity to the situation, as both countries have recently agreed to a temporary pause in their trade war [19].