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HSBC and Standard Chartered are wrong to kowtow to China over Hong Kong

I keep saying that I don’t want to be political on this blog – I’m not qualified and it’s not why you read it – but, as a human being, I cannot ignore things like Black Lives Matter, the lockdown approaches of different countries, the suppression of religious groups, the wars that continue (especially in Yemen) and the struggle to live in most of the world.

I don’t ignore these things. I’m very, very, very aware of them.

This is why I cannot sit here quietly and ignore what’s going on in Hong Kong without comment. Why? Because, as a former British colony, I cannot believe the lack of action, policy or comment from HSBC and Standard Chartered.

HSBC and Standard Chartered declined to comment when asked about the arrests of protesters under the new law.

These are two banks that I have dealt with for years, and I know why they’re being so quiet. They have huge amounts of business and exposure to China. As a result, they’ve kept schtum about the new Chinese security rules in Hong Kong, breaching the 1997 handover agreement and creating massive disturbance in the system.

It creates a huge issue for Hong Kong’s future and its citizens, but it also weakens the financial system and the role of Hong Kong in world trade. Until recently, I saw Hong Kong, its financial system and its FinTech community as the bridge between China and the rest of the world. Now … it’s just Chinese … and that’s the thing that’s wrong.

Hong Kong is not Chinese. It’s a maelstrom of world nationalities and is just like London, Dubai and other financial centres. It’s a global platform that is open to everyone. That’s what’s wrong with what’s going on in Hong Kong. It’s just wrong, and HSBC and Standard Chartered have massive influence to pressure this situation, and are just letting it fly in the wind, unlike the UK Government.

Now, I may be upsetting my Chinese friends as I write this, and I don’t want to upset my Chinese friends. I’m a huge fan of China, as anyone who reads this blog will know. I’ve written regularly about my admiration of China, the new super economy, and the fact that it’s taking over from America. I really admire that and admire China. But I don’t admire the Crackdown on the Uighurs‎, the censorship of freedom and thinking, or the way in which people’s rights appear to be abused. And I know that I am not alone in this dilemma.

On the one hand, I love and admire China today and its history; on the other, I hate the way in which the government’s activities are against the wider interests of China and the world.

Probably HSBC and Standard Chartered are in the same situation. The Guardian describes it well:

HSBC and Standard Chartered risk being caught up in the geopolitical struggle between the US and China after the US House of Representatives passed legislation targeting Chinese officials involved in implementing a national security law in Hong Kong.

Banks who do business with officials involved in the security law could face sanctions, amid concerns the security law could be used to crack down on dissent in Hong Kong. More than 370 people were arrested in Hong Kong on Wednesday after the new powers were introduced.

HSBC and StanChart have regularly been caught out by US authorities for infringements over money laundering, but their prevarication over any policy on what is happening in Hong Kong is out of order. They need to take a stance.

George Magnus, a research associate at Oxford University’s China Centre,  sums it up best:

“The longer the friction [between the US and China] is maintained at this level, the worse it is for companies like HSBC and Standard Chartered who have to make huge decisions on which side their bread is buttered.”

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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