Pleasing China and the West at the same time is a tough task and British bank HSBC is learning it the hard way.
After the top executive of the bank in Asia made a public declaration of the company’s stance of supporting the controversial national security law that China plans to introduce in Hong Kong, the London-based bank has come under severe criticism from Western government officials and investors.
On Tuesday, United States Secretary of State Mike Pompeo made a blistering statement reprimanding HSBC for lending support to the new Chinese legislation. He said that the bank would not be able to earn respect in Beijing by “corporate kowtows”.
Critics of the new proposed Chinese law for Hong Kong allege that it will completely erode the autonomy of the island city – one which was promised to it by China when it took over the former British colony about two decades ago.
Last week, a picture of HSBC’s Asia Pacific CEO Peter Wong signing a petition supporting the new law was posted on Chinese social media by the company which was the tipping point for West’s criticisms of the lender.
A number of top British lawmakers including Tom Tugendhat, chairman of the UK Parliamentary Foreign Affairs Committee, have also raised concerns and questioned the stance of the bank.
Criticisms are also flowing in from the investors of the bank. “We are uneasy” at the decisions of HSBC and fellow UK-based lender Standard Chartered, both of which have showed support for the law without knowing how it will work in practice, said David Cumming, chief investment officer for equities at Aviva Investors, which is a shareholder of HSBC, in a statement on Wednesday.
“If companies make political statements, they must accept the corporate responsibilities that follow,” Cumming said.
The situation was difficult for HSBC even before the photo of Wong was published on social media. The bank was earlier singled out for its silence on the law by the former Hong Kong leader Leung Chun-Ying who demanded that the bank should come out in support of the law.
But even after expressing support for the new Chinese law for Hong Kong, HSBC still does not seem to get much favor from Beijing.
The bank was accused of harboring “a lingering ambiguous attitude toward Hong Kong’s national security law” by China’s state-run tabloid Global Times on Tuesday. The tabloid also pointed out to longstanding allegations against the bank in China that he lender had helped the United States prepare the case against Huawei’s chief financial officer, Meng Wanzhou.
HSBC “may now face a worsening dilemma, where it’s far from safe from reprisals,” the Global Times reported, citing “some observers.”
Even Pompeo has noted that HSBC still faces a chilly reception in China.
“That show of fealty seems to have earned HSBC little respect in Beijing, which continues to use the bank’s business in China as political leverage,” he said in his statement, calling the Chinese Communist Party’s “browbeating” of HSBC a “cautionary tale.”
Everyone has “the right to make independent decisions based on merit”, said a spokesperson for China’s Foreign Ministry on Wednesday.
“For some in the US, perhaps the world only lies in two categories — either they are with the US and should attack China, or they have been coerced by China,” said Hua Chunying in response to a question about the Pompeo statement. “These views are narrow-minded and ridiculous.”
(Adapted from CNN.com)