The key question for every Wall Street CEO on China: ‘Who has gotten paid?’

Turner: How is that market opening up?

Duffy: It’s not. It’s still closed.

Turner: But do you —

Duffy: I’m not a Chinese expert, I’ll tell you that right now. It’s difficult over there. They move slower. We’re an impatient bunch here in the US. The Europeans are probably the second-most impatient, and [the British] are calm, and then you have the Asian community where 50 years is like tomorrow. It’s like a different world. People say the markets are going open up. Yeah, they probably will someday.

I don’t know when that’s going to be. But when you look at what they’re trying to effectuate, it looks like they’re trying to bring the markets to them rather than bring their markets to the rest of the world. That’s what it looks like to me right now.

Turner: I was in London when the Hong Kong exchange acquired the London Metal Exchange, which is in keeping with what you’re describing.

Duffy: Bad deal.

Turner: So how does that influence your thinking about China? If that market opens up there’s a huge opportunity, but you may be waiting forever.

Duffy: So you continue to invest and invest in a smart way. You don’t put all your eggs in a Chinese basket and say, “Oh, geez, I hope I am going to win there someday.” I think you have to participate, you have to be there, but at the same time you have to understand, because history has told us, you could be waiting 15 years.

You have to continue to be there, continue to work, but at the same time you have to be very mindful of the cost when you decide to invest in a place that’s supposedly going to open up their markets, but you don’t know when. So I’m very cautious.

Turner: I do think a lot of firms have invested in China in the hope that the markets would open up. They’ve spent a lot of money on talent and that never paid out.

Duffy: I want to know: Who has gotten paid from China? Who has made money as a European or US entity in China? The one that was going to make money was Citibank, and then 2008 happened. My point is, I don’t know anyone who has gotten paid.

Turner: But you have to be there.

Duffy: But you have to have some sort of investment there. There’s no question about it. They’re not just some backwards country. They are a player in the global economy. They are going to be bigger and bigger as time goes on. I think that, eventually, as they continue to be a part of the global economy, their markets will be forced open whether they like it or not.

You can read the full interview here.