Asia-Pacific chief's stance on China move inserts U.K.-based
bank into Hong Kong fray
By Jing Yang and Simon Clark
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (June 4, 2020).
A top HSBC executive signed a petition supporting China's move
to impose security legislation on Hong Kong, putting the bank
squarely on the side of Beijing in the fight over the future of the
territory.
The global bank, based in the U.K. but whose roots and profits
grow mostly from Hong Kong and Asia, had been under pressure in
recent days to come out publicly over the law. The U.S., U.K. and
other Western governments have strongly objected to the new law,
saying it breaches an agreement that granted Hong Kong a degree of
autonomy when the U.K. handed back control of the city to China in
1997.
In a post on one of HSBC's social media accounts in China, the
bank's Asia-Pacific head Peter Wong is seen signing a petition in
support of the law. In the post, the bank said "HSBC respects and
supports any laws that stabilize the social order in Hong Kong and
revitalize economic prosperity and development in Hong Kong."
"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,'" an HSBC
spokeswoman in London said when asked to comment on Mr. Wong's
statement.
Mr. Wong, who also chairs the Hong Kong General Chamber of
Commerce, said in an interview with China's official Xinhua News
Agency published on June 3, that the national security law will
bring social stability in Hong Kong. "With the backing of the
rapid-developing mainland market, Hong Kong's economy will
definitely walk out of the clouds and get back to the development
path."
HSBC has flourished in Hong Kong since British bankers
established it there in 1865 to finance trade between Asia and the
West. It has tried to stay out of the political turmoil in the
city.
Last week, pro-Beijing former Hong Kong Chief Executive Leung
Chun-ying called on HSBC to express support for the new Chinese
security law in a Facebook post. His request to HSBC came a day
after the U.K., U.S., Canadian and Australian governments expressed
"deep concern" about China's introduction of the law.
Chinese officials have said the new law is necessary to quash
separatism and foreign interference in Hong Kong, which has been
rocked by antigovernment protests since last summer.
In recent decades HSBC deepened its relationship with China,
opening retail branches and starting a securities venture as the
country opened its financial markets. Expansions in the U.S. and
other parts of the globe were less successful, and the bank has
made repeated pledges to double down on Asia.
HSBC said in February that it would shed 35,000 jobs and cut
business lines across the U.S. and Europe to focus on its Asian
heartland.
HSBC had previously sought to avoid taking a political stance on
Hong Kong by instead playing up its role as a major employer and
lender supporting local economic growth. In newspaper ads last
August, it called for the rule of law and a peaceful resolution to
the protests.
It has been impossible to stay entirely out of the fray, though.
After HSBC shut down an account used to finance protest-related
causes late last year, protesters vandalized bank branches and
sprayed red paint on Stephen and Stitt, a pair of bronze lions
outside its Hong Kong headquarters.
The bank at the time said the account wasn't being used for its
stated purpose, and the shutdown was "categorically unrelated to
the current Hong Kong situation."
At an August meeting between Hong Kong Chief Executive Carrie
Lam and bank and business executives, Mr. Wong was one of a few who
agreed to stand with Ms. Lam at a news conference, in what was
construed as political support.
The political debate over the security law leaves HSBC in a
difficult position. While most of its business is in Asia, it keeps
London as its headquarters and is regulated by the Bank of England.
HSBC generated 90% of its pretax profit in Hong Kong last year.
Mr. Wong's petition signing came on the same day that U.K. Prime
Minister Boris Johnson responded to the law by saying he would
consider providing a route to British citizenship for nearly three
million Hong Kong residents.
"We all know that politicians should not run banks but this
shows that it is ill-advised for bankers to get involved in
politics," said Alistair Carmichael, a British lawmaker who
co-chairs a parliamentary group on Hong Kong. "Whatever the
economic advantage that HSBC may think they obtain from this
posture in the longer term they risk destroying the stable
environment on which they rely," he said.
HSBC's globe-straddling profile often leaves one part of its
empire unhappy. Earlier this year U.K. regulators forced all banks
based in the country to cancel dividends to investors as a way to
conserve capital as the coronavirus hit the country hard. HSBC had
to follow along even though its largest market, Hong Kong, was
reopening. This hit the bank's mom-and-pop investor base in Hong
Kong hard, and its shares recently traded below their lowest level
in over a decade.
Standard Chartered PLC, a London-based bank which like HSBC does
a big share of its business in Asia, also voiced support for
Beijing's policy in Hong Kong on Wednesday.
"We believe the national security law can help maintain the long
term economic and social stability of Hong Kong," said a Standard
Chartered spokesperson.
Write to Jing Yang at Jing.Yang@wsj.com and Simon Clark at
simon.clark@wsj.com
(END) Dow Jones Newswires
June 04, 2020 02:47 ET (06:47 GMT)
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