HSBC (HSBA) has publicly thrown its weight behind China’s proposed national security laws for Hong Kong, after the lender's Asia Pacific CEO Peter Wong signed a petition backing the controversial measures. While framed as an act of support for the city state’s economic recovery, investors will need to consider whether the development could open the lender up to boycotts or US sanctions.
In a statement, HSBC said it respects and supports “laws and regulations that will enable HK to recover and rebuild the economy and, at the same time, maintain the principle of ‘one country, two systems’”. Critics of the laws – which include the criminalisation of loosely defined activities related to “subversion” and “secession” – believe that China wants to remove freedom of speech and protest, jeopardising the constitutional principles enshrined in the PRC’s administration of the city state.
The move drew online backlash from customers, Hong Kong-based democracy campaigners and UK politicians. On Twitter, Conservative MP Tom Tugendhat questioned how the support aligns with the bank’s “definition of corporate social responsibility”, while his colleague Neil O’Brien described HSBC as “a bank that is backing Beijing's repressive new security laws, designed to snuff out freedom in Hong Kong”.
Labour peer Andrew Adonis was similarly damning. “Utterly disgraceful action by HSBC,” he wrote on Twitter. “I intend to take this up with the chairman and chief executive of HSBC in London. And with HSBC’s major shareholders.”
HSBC is not alone in its stance. This week, fellow London-listed lender Standard Chartered (STAN) also backed the national security law, while hoping further clarity on the final provisions “will enable Hong Kong to maintain economic and social stability”. The bank described the ‘one country, two systems’ principle as central to the city state’s future success and “the bedrock of the business community’s confidence”.
FTSE 100 constituent Prudential (PRU), which is growing in mainland China and counts Hong Kong as the single largest contributor to its Asian life insurance arm’s profits, declined to comment on the legislation.
