UPDATE 2-JPMorgan taps economist Gong for China banker role

* Economist Frank Gong becomes a top China banker

* Gong is well known for his bullish China forecasts

* Gong expected to seek more corporate clients in China (Adds comments from Frank Gong)

By George Chen and Simon Rabinovitch

HONG KONG/BEIJING, July 31 (Reuters) - Frank Gong, a prominent JPMorgan economist who has been bullish on China's yuan and economic prospects for years, has been promoted to vice chairman of the firm's China investment banking division.

Gong, who made his reputation with a correct forecast of China's landmark yuan appreciation policy move in 2005, will also share a role as chairman of JPMorgan's China Diversified Industry Clients division, the bank said in a statement.

In his new role, Gong, who has been JPMorgan's chief China economist for five years, will report to Fang Fang, JPMorgan's China chief executive, according to the statement.

"We hope to provide valuable advice to help domestic companies to grow and help to integrate the Chinese economy further in the global economy," Gong told Reuters.

"And of course in the process help global companies to get deeper, more access in the market," he added.

Gong was the first foreign investment bank economist to predict the magnitude of China's economic stimulus package to counter the global financial crisis in 2008.

The bank statement said he will focus on expanding JPMorgan's corporate client business in China.

"Domestically there are a lot of opportunities, a lot of industries need to consolidate," he said, adding that helping Chinese companies expand abroad through acquisitions will also be part of his focus.

A retail giant in the United States with a reputation for conservative risk-taking, JPMorgan has survived the financial crisis and benefited from its acquisition of the troubled investment bank Bear Stearns. [ID:nN236886]

In the first half of 2009, JPMorgan topped underwriters globally in terms of fees, outpacing long-term rivals including Goldman Sachs (GS.N) and Morgan Stanley (MS.N), according to Thomson Reuters data and research. [ID:nN30451561]

CHINA CONNECTIONS

JPMorgan helped to underwrite initial public offering of shares for two Chinese companies -- Zhongwang Holdings Ltd (1333.HK) ($1.27 billion) in May and BBMG Corp (2009.HK) ($884 million) in July. Zhongwang was ranked as the third largest IPO worldwide so far this year.

Gong, who was born in China and holds a Ph.D. in Financial Economics from Wharton at the University of Pennsylvania, joined JPMorgan from Bank of America (BAC.N) in 2004.

He was not the first economist-turned investment banker in Asia. In April 2007, Morgan Stanley surprisingly announced that Stephen Roach, its high-profile chief economist known for his pessimism on the U.S. economy and early foretelling of China's rise, as its Asia chairman.

Both Gong and Roach are based in Hong Kong but have been frequent travelers to mainland China and have close ties with top Chinese officials and regulators including its central bank governor, Zhou Xiaochuan.

"(China's) economy is on the path of accelerating recovery and that process is more sustainable than people thought," said Gong.

"Next year growth will be more powered by private demand-driven factors, rather than simply state-driven stimulus. Both in terms of quality and speed of growth, next year will be better than this year," he added.

Early this year, Charles Li quit JPMorgan, where he served as China chairman, to join Hong Kong Exchanges and Clearing (0388.HK) as chief executive of the bourse. [ID:nHKG271695]

A replacement for Li's former top job at JPMorgan has not been made yet. (Editing by Ken Wills and Lincoln Feast)