HSBC is warming on all fronts after China backs Hong Kong

HSBC is warming on all fronts after China backs Hong Kong

In a strongly-worded statement on Tuesday, US Secretary of State Mike Pompeo was criticized HSBC (HBCYF) To support the legislation, saying “kowtows companies” will not win the bank’s respect in Beijing. Critics fear that the law undermined the autonomy promised by Hong Kong when the former British colony was returned to China more than 20 years ago.
Pompeo is the latest politician to accumulate on HSBC after the company posted a photo on Chinese social media last week showing Asia Pacific CEO Peter Wong signing a petition supporting the law. Tom Tugendhat, chair of the UK Parliamentary Foreign Affairs Committee, is among the British lawmakers who They questioned the HSBC decision.
The bank’s investors also began to influence. “We are uncomfortable” with the decisions of HSBC and its fellow UK-based lender, David Cumming, Aviva Investors’ equity chief investment officer and HSBC shareholder, said in a statement on Wednesday. Standard Chartered (SCBFF) To uphold the law without knowing how it will work in practice.

“If companies make political statements, they must accept the responsibilities of the company that follows them,” Cumming said.

Even before Wong’s photo was published, HSBC faced a difficult situation. The former Hong Kong leader, Young Chun Ying, had previously privatized the bank because of his silence on the law, requiring HSBC to express its support.

Now that the bank has taken a position, it still appears that it does not beat Beijing. State-run tabloid in China Global Times On Tuesday, it accused the bank of harboring a “vague, long-standing stance towards Hong Kong’s National Security Law,” and pointed to a long-standing accusation in China that HSBC had helped the United States build a case against Huawei’s chief financial officer, Meng Wanzhou.
Meng is Under house arrest In Canada, it is awaiting a decision on whether to be extradited to the United States to face charges of bank fraud and evading economic sanctions against Iran. U.S. authorities claim that the Chinese technology company submitted wrong information to HSBC as part of this scheme – a claim Huawei denies. HSBC told Reuters last year that it had provided information to the authorities.Upon formal request“.
“HSBC may now face an even worse dilemma as it remains out of safety from reprisals” Global Times mentionedQuoted from “Some Observers”.

Even Pompeo noticed that HSBC still faced cold reception in China.

“This show of loyalty seems to have received little respect for HSBC in Beijing, which continues to use the bank’s business in China as a political leverage,” he said, describing it to the Communist Party of China as “cautious.” “

A Chinese Foreign Ministry spokesman said on Wednesday that everyone has “the right to make independent decisions on the basis of merit.”

“For some in the United States, the world may only lie in two categories – either they are with the United States and they must attack China, or China has forced them to,” Hua Chunning said when asked about Pompeo’s statement. “These views are narrow-minded and funny.”

The attacks are a major headache for HSBC, which started its life more than 150 years ago as the Hong Kong and Shanghai Banking Corporation with the aim of financing trade between Asia and Europe. The bank still has a large commercial presence in the region: Last year, its divisions in Hong Kong and China withdrew enough funds to eliminate losses in the UK and keep the company profitable.

HSBC declined to comment. Hong Kong-listed bank shares closed 1.5% lower on Wednesday.

A pedestrian walks through HSBC in Hong Kong in 2017.

Willie Lam, associate professor at the China Studies Center at the Chinese University in Hong Kong, said the bank, as a British company, was at risk of becoming collateral damage between the UK and China.

He pointed out that Huawei, for example, Trying to persuade the UK government It can be trusted to help build the 5G network in the country. Lam said that if British regulators reject Huawei’s progress, China could retaliate with HSBC punishment. It is also rumored that the bank has long been on the list “Unreliable” foreign companies China could be blacklisted.

Lam said: “It is not surprising that the Chinese have settled on HSBC as a target.”

Meanwhile, Washington is trying to “build an alliance” of allies against Beijing, according to Lam. He said Pompeo’s decision to call HSBC specifically reflects the “worsening” tensions between the United States and China.

Lam said that HSBC’s predicament is, in some ways, now the political storm that swept Hong Kong’s leading airline. Cathay Pacific (CPCAY). Some of its employees He participated in widespread anti-government protests In the city last year, which angered Beijing. And while the airline Take steps to surrender to the Chinese authoritiesTwo senior executives resigned.

Ewen McSweeney, Isaac Yi, and Jennifer Hansler contributed to this report.

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