Banks

HSBC's Asia chief backs China security law for Hong Kong

Key Points
  • Now Europe's largest bank, HSBC has its origins in Hong Kong, a British colony until 1997.
  • It had previously avoided weighing in on the political situation there in recent months, while facing increased calls in Chinese state media to make its position clear.
A pedestrian walks past illuminated signage for HSBC Holdings Plc displayed outside a bank branch in the Central district of Hong Kong, China.
Anthony Kwan | Bloomberg | Getty Images

HSBC's top executive in Asia has signed a petition backing China's imposition of a national security law on Hong Kong, the bank confirmed on Wednesday, breaking years of political neutrality for the UK-based, Asia-focused lender.

Asia-Pacific Chief Executive Peter Wong signed the petition and HSBC itself "respects and supports all laws that stabilise Hong Kong's social order", the bank said in a post on social media in China.

Now Europe's largest bank, HSBC has its origins in Hong Kong, a British colony until 1997. It had previously avoided weighing in on the political situation there in recent months, while facing increased calls in Chinese state media to make its position clear.

A Hong Kong-based spokeswoman for the bank declined to comment beyond the contents of the post.

Wong, a member of the Chinese People's Political Consultative Conference, a political advisory body in China, told the official Xinhua news agency in an interview published on Wednesday he hoped the law could bring stability to Hong Kong.

HSBC moved its headquarters to London in 1993, but Hong Kong is still its biggest market. It has invested billions of dollars in China to grow its market share in the world's second-largest economy, and it has become harder for the bank to toe an apolitical line as it faces criticism from both the pro- and anti-Beijing camps.

"The U.S. no longer considers Hong Kong autonomous from China and there are risks that HSBC becomes a political football after Peter Wong's declaration of support for the new national security law," Will Howlett, analyst at HSBC shareholder Quilter Cheviot, said.

VIDEO1:2801:28
Hong Kong's role as China's link to the world will keep eroding, says expert

Western human rights groups were critical: "Does HSBC feel compelled to weigh in on other laws in other countries? We have watched over the past week China clearly assert pressure on businesses and other actors to show their support for the law to create the illusion of support," said Sophie Richardson, China director for U.S.-based Human Rights Watch.

HSBC was caught up in Hong Kong's months-long anti-government protests, with its branches vandalised and bronze lion statues outside its headquarters defaced during a protest march on Jan. 1.

Some protesters accused HSBC of being complicit in action by the authorities against activists trying to raise money to support protesters, accusations the bank denied.

Former Hong Kong leader Leung Chun-ying meanwhile last week criticized HSBC for not supporting Beijing over London in the spat.

Some of HSBC's corporate peers have faced swift retribution from Beijing for perceived support for the anti-government protesters. Cathay Pacific Airways last year was forced to suspend staff involved in the protests, and chief executive Rupert Hogg and his top deputy resigned in August.

VIDEO3:1003:10
Hong Kong security law 'doesn't change much overnight': Economist

Authoritarian

Hong Kong returned to Chinese rule in 1997 with the guarantee of freedoms, such as an independent legal system and right to protest, not enjoyed on the mainland.

The city was rocked by sometimes violent pro-democracy, anti-China unrest last year by protesters fearing an erosion of those freedoms by Communist Party rulers in Beijing. China denies the accusation and accuses the West of stirring up trouble.

The bank's statement came as tensions rise between London and Beijing after British Prime Minister Boris Johnson said the UK would not walk away from the people of Hong Kong if China imposed the new law. 

Britain has called the law "authoritarian" and said it is in breach of the "one country, two systems" principle enshrined in a 1984 Sino-British Joint Declaration.

Jardines Group, one of Hong Kong's original foreign trading houses, published a full-page statement in the pro-Beijing newspaper, Ta Kung Pao, saying it was important to enact a legal framework to safeguard the city's national security.