HSBC’s shameful enthusiasm for the Chinese regime should alarm all who value freedom
The bank is in a difficult situation, but the zeal with which it applies Communist party rules is alarming
BEN MARLOW CHIEF CITY COMMENTATOR TELEGRAPH 22 July 2022
In a world where every multinational feels compelled to have a “purpose”, few grate quite as much as the one that HSBC concocted just as China imposed draconian new security laws on Hong Kong.
Apparently the bank is “opening up a world of opportunity”. But citizens of the former British colony must wonder whether HSBC’s support of Beijing’s beefed up powers have come at the expense of their own opportunities. MPs in the UK accused HSBC of “aiding and abetting one of the biggest crackdowns on democracy in the world”.
Still, HSBC is at least consistent when it comes to empty slogans. Who can forget the vomit-inducing “we are not an island” campaign, portrayed as an embrace of internationalism, but sounding suspiciously like a veiled dig at Brexit.
At least the “breaking down borders” sequel was more accurate: forget diplomacy. When it came to Hong Kong, China simply booted down the front door and moved right in. And HSBC didn’t say a word.
And what of the opportunities for others living under one of the world’s increasingly repressive governments? Millions of Tibetans, Uyghurs Muslims, and Mongolians have all suffered years of persecution by the ruling Communist regime.
Or how about the billionaire Jack Ma, who mysteriously vanished for months after seemingly becoming too powerful for Beijing’s liking? Or tennis star Peng Shuai, who disappeared from public view alleging that former government official Zang Gaoli had sexually assaulted her?
This is not a regime that shares the West’s longstanding values. It rules with fear and force, and yet Britain’s largest financial institution seemingly has no qualms about strengthening ties in the region in the pursuit of commercial gain.
The latest development is particularly worrying. HSBC has become the first overseas bank to install members of the Chinese Communist party into its operations in the country.
Its investment banking arm, HSBC Qianhai Securities, has set up something called a CCP committee, which is typically made up of three or more party officials, according to the Financial Times. Though technically required by Chinese law, no other foreign lender has abided by the requirement. This should set off alarm bells in Westminster. Until now, HSBC’s support for the Chinese regime has largely been of the softer kind, but this has the potential to be something of a different magnitude altogether.
In fairness, it is in a pretty wretched situation, stuck firmly between American and Chinese demands, in a battle it didn’t start, and in a country where the leadership is acting in ways it hasn’t pushed for.
Nor is it the only major overseas corporation that is enabling Beijing’s oppression at home, and growing hostilities towards the West, by housing extensive operations in China.
If many, though not all, Western multinationals are prepared to pull out of Russia due to Vladimir Putin’s aggression against Ukraine, where’s the line that forces the same companies to re-evaluate their presence in China? If it’s an invasion of Taiwan, then the hour may be later than they think.
But it is the zeal with which HSBC is embracing the Chinese approach that should concern the UK Government. The fact that no other financial institution has complied with Communist Party rules suggests the bank is going out of its way to appease Beijing.
At the very least, an organisation that claims to not do politics is at risk of being seen as a shameful cheerleader for the Chinese system.
Questions may also be asked about whether HSBC is now straying into even more dangerous territory.
For a start, customers may want to ask whether they should take their money elsewhere. Advertising campaigns that portray HSBC as a cuddly, liberal organisation aren’t just woolly nonsense, they are hypocritical in the extreme and will jar with many of those that bank there.
But there is a genuine existential question for the board to answer, and that’s the nagging issue of whether the time has come for it to seriously consider breaking itself up. This isn’t easy to answer since the ramifications are potentially huge, and the precise make-up of any split far from clear, which perhaps explains why chairman Mark Tucker and chief executive Noel Quinn continue to dodge it.
In a world where ministers are prepared to prevent China from investing in British microchip manufacturers, is the next prime minister willing to stand aside while Beijing exerts growing influence over HSBC?
It’s not impossible to imagine that before long one of the high profile critics of Chinese human rights abuses on the back benches, such as Sir Iain Duncan Smith or former leadership candidate Tom Tugendhat, asks whether the bank is at risk of being compromised by a hostile power.
A break-up may be the only way to silence any doubts there are about HSBC becoming a tool of the Chinese state. If it refuses to do so willingly, might Western politicians force it to do so, if there are fears that an institution in which millions of British people and businesses stash their money is inadvertently acting against British interests?
There are mounting concerns in Washington, Taipei and across the West that China could try to annex Taiwan in the coming years. In that situation, HSBC as it is currently structured simply cannot be on both sides. Indeed if Western sanctions are met by Chinese counter-measures, then HSBC could be blocked by the US from doing business with Beijing and vice versa. This is the growing elephant in the room that HSBC’s bosses may soon be forced to confront.
