Daily Management Review

HSBC And StanChart Draw Criticism Over Supporting China’s Hong Kong Security Law


HSBC And StanChart Draw Criticism Over Supporting China’s Hong Kong Security Law
The backing of imposition of China’s national security law for Hong Kong by Beijing by HSBC and Standard Chartered was severely criticized by senior British politicians. The stance taken by the two banks is in conflict with the British government’s opposition to recent strategy of China about the new legislation for Hong Kong.
Support for the new Chinese law for Hong Kong was supported earlier in the week by the two British banks in a deviation from the usual policy of political neutrality. The proposed new legislation has already instigated a revival of anti-government demonstrations in Hong Kong, the financial hub of Asia.
“I wonder why HSBC and StanChart are choosing to back an authoritarian state’s repression of liberties and undermining of the rule of law,” Tom Tugendhat, Conservative Party member and chair of the Foreign Affairs Committee tweeted.
A large number of people who identified themselves to be customers of HSBC on social media claimed that they will be closing down their accounts with the bank because of its support for China’s policy for Hong Kong. 
There were no comments available from HSBC and StanChart.
The responses from the British politicians and even customers on social media reflects the dilemma for the two lenders as hey are based in the United Kingdom but have deep roots for its business in China as the two companies are trying to expand into the Chinese market at a time when there is a clash of the Chinese government with those of the UK and the United States.
As in 2019, about 90 per cent and 41 per cent of the pre-tax profit of HSBC and StanChart respective was accounted for by Hong Kong, which clearly reflects role and the importance of the Asian financial hub for the two lenders.
“The investment case for HSBC is clouded by the outlook for Hong Kong and steps by China to impose greater control over the autonomous region,” said Will Howlett, equity analyst at HSBC shareholder Quilter Cheviot.
The support from HSBC should have come earlier, suggested a report published by the Global Times, which is published by the People’s Daily, the official newspaper of China’s ruling Communist Party.
There has been retribution from Chinese authorities against some of the corporate clients of HSBC such as Cathay Pacific Airways over the perception that the companies had supported the anti-government protesters in Hong Kong.
On Friday last week, Hong Kong leader Leung Chun- ying had criticized HSBC for the bank not making its “stance” clear on the new proposed law for Hong Kong by Beijing and said that the China business of the bank could be “replaced overnight” with Chinese banks as well as those from other countries.
The imposition of the new proposed law for Hong Kong, the former British colony, has been severely criticized by the United States, Australia and Canada.
The likely reason for the support to the new legislation by the two banks was probably because of the business imperative, said some employees of HSBC and StanChart.
 “The reason for the statement is white terror, forced action to protect the bank’s business,” Wong, an HSBC staffer in Hong Kong who declined to give his full name, told Reuters. “When (these) two banks started to take a stand, it will be no surprise that other banks will start to follow suit.”