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UK banks HSBC and Standard Chartered have openly supported the national security law China is imposing on Hong Kong, breaking their silence on the legislation opposed by the British government. The decisions follow similar moves by Swire and Jardine Matheson, two British colonial-era trading houses.
In a carefully worded post on Chinese social media platform WeChat on Wednesday, HSBC said that Peter Wong, chief executive of the lender’s Asian businesses, had signed a petition in support of the legislation. “We reiterate that we respect and support 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 post said. HSBC confirmed the contents of the post and declined to comment further. Standard Chartered, the London-based Asia-focused bank, also voiced its support.
“We believe the national security law can help maintain the long-term economic and social stability of Hong Kong,” it said in a statement sent to the Financial Times. Shares in HSBC and Standard Chartered rose by 1.3 per cent and 1.8 per cent, respectively, in Hong Kong trading on Thursday.
Last week Leung Chun-ying, who served as the Chinese special administrative region’s third chief executive, renewed pressure when he called for the HSBC to declare its support for the law. “HSBC has been enjoying unique privileges in Hong Kong which should not be taken for granted,” he said. Nonetheless, HSBC’s move is likely to be contentious with both politicians in the UK, where the bank is based, and parts of its Hong Kong customer base, who see the proposed legislation as potentially overriding the Hong Kong justice system and as a threat to the “one country, two systems” framework.
Ip Kwok-Him, a delegate to China’s parliament, the National People’s Congress, said HSBC should take a stance on the laws. “As a bank which prints banknotes in Hong Kong, they should express themselves,” he told the Financial Times. Last week China bypassed the city’s legislature to approve a plan to impose national security laws on Hong Kong. While there is limited detail on what they contain, China says the intention is to target “splittist, subversion of state power, terrorism or interference by foreign countries or outside influences” in Hong Kong.
The UK has opposed the new laws, and Boris Johnson, prime minister, on Wednesday reinforced the stance by stating that if the laws came into effect, Hong Kongers with British Nationals (Overseas) passports would have greater access to visas to live and work in the UK. HSBC — which was founded in Hong Kong in 1865, but moved its headquarters to London after taking full control of Midland bank in 1993 — has been squeezed on all sides in Hong Kong over the past year, where it makes the vast majority of its profits.
Hugh Young, managing director at Aberdeen Standard Investments, a large shareholder in the bank, said HSBC was “between a rock and a hard place”. While Hong Kong will stay its biggest revenue generator, over time it could risk losing market share to Chinese banks, he added. Pro-democracy protesters have previously targeted HSBC branches and the bank’s main offices in Hong Kong after they closed accounts run by those fundraising for the protests, on the grounds of adhering to money-laundering regulations. And earlier this year a group of HSBC’s retail investors in Hong Kong threatened legal action over its decision to cancel its dividend because of pressure from the Bank of England amid the coronavirus pandemic.
Swire and Jardine Matheson have made public statements in support of the law, with Jardines taking out an advertisement to announce the position in a pro-Beijing Hong Kong newspaper on Wednesday.
In a statement to local media last week, Swire said the enactment of national security legislation “will be beneficial for the long-term future of Hong Kong as a world-leading business and financial centre”.
Source: The financial times