China has HSBC’s taipan in a vice with few options but to fall in line with the security law for Hong Kong in the bank’s biggest market
- As a member of the top Chinese political advisory body, HSBC’s Asia-Pacific CEO had to document his support for the law, says source
- Bank had limited room for manoeuvre as revamped strategy relies heavily on Asian operations
On a rainy Saturday at the end of May outside the Wan Chai subway station in Hong Kong, HSBC’s Asia-Pacific chief executive Peter Wong Tung-shun added his name to a petition in support of the Chinese legislature’s plan to enact a national security law for the city.
“That interconnectivity of East and West is a huge part of their franchise strength,” said Fahed Kunwar, who recommends investors “sell” the bank, at the stock brokerage Redburn (Europe). “Really, the issues right now are very, very threatening to them. They’re kind of caught in a geopolitical tug of war between the US and China.”
The run-up to HSBC publicly supporting the law showed the pressure Beijing can exert – both directly or through surrogates – on Western companies seeking the right to do business in the world’s second-biggest economy and the sometimes uncomfortably close intermingling of politics and business in the mainland.
Wong, who has run the bank’s Asia-Pacific business since 2010, is one of the 124 members of Hong Kong’s delegation to the Chinese People’s Political Consultative Conference (CPPCC), an advisory body to the Chinese legislature that includes Communist Party cadres and non-members, business leaders, the press, religious leaders and representatives from Hong Kong and Macau.