Hong Kong: how HSBC became wrapped up in China’s ‘security law’
Global bank has spent much of 2020 embroiled in fierce debate over territory’s sovereignty
HSBC has been a staple of Hong Kong’s financial landscape for over a century, but the banking giant has endured a torrid 2020 after becoming embroiled in the ongoing debate over China’s “security laws”.
And after breaking cover to back the laws in June, HSBC found itself under fire again, this time from Hongkongers and British MPs, who accused the company of kow-towing to Chinese influence.
A geopolitical storm
The security law, passed earlier this year, became the subject of fierce opposition after effectively criminalising any attempts by Hong Kong to break away from China. The legislation also outlawed what Beijing calls “subversion”, defined as “undermining the power or authority of the central government”.
As a “financial bridge between Asia and the west” HSBC was caught in the crossfire, with activists venting their frustration at the bank’s stance by vandalising branches across the city, The Guardian reports.
The bank revealed its hand in June, when HSBC’s Asia-Pacific chief executive Peter Wong said on the Chinese social media platform WeChat that he had signed a petition supporting Beijing’s new rules. Wong said the bank “respects and supports laws and regulations that will enable Hong Kong to recover and rebuild the economy and, at the same time, maintain the principle of ‘one country, two systems’”.
The statement prompted outrage from protesters and was followed by months of silence from HSBC.
Meanwhile, security officials in Beijing are also treating the bank with scepticism due to rumours that it collaborated with protesters. And last week, Chinese state-run newspaper The Global Times reported the bank was likely to be included on an official list of “unreliable entities” that Beijing sees as a threat to China’s sovereignty.
What does it mean for business in Hong Kong?
HSBC has been widely condemned by rights groups in the West, who have sounded the alarm over the increasing influence of China on Hong Kong.
HSBC’s “international commitments are now being tested, as it finds itself caught in the middle of a trade row between Washington and Beijing”, a battle that could have “material consequences for a bank that plans to expand further in Asia”, The Guardian says.
But HSBC’s predicament points to a wider issue facing businesses operating in the former capital-friendly city.
The US response to China’s aggression, the Hong Kong Autonomy Act, “authorises sanctions on those involved in ‘extinguishing Hong Kong’s freedom’, as well as on financial firms that knowingly do business with them”, The Economist says.
With China increasingly flexing its economic and political muscle, business attempting to operate in the territory may find themselves stuck between a rock and a hard place.