China’s crackdown and the road to Hong Kong ‘appeasement’

UK Foreign Affairs Committee challenges HSBC over its moral and political judgement amid democracy clampdown

Big business has found that the road to appeasement can be paved with gold in China. 

Money often edges out morals. 

Still, a glimpse of working in the shadow of President Xi Jinping’s ruling Communist Party was brought into sharp focus this week. 

Facing a British parliamentary Foreign Affairs Committee, HSBC Chief Executive Noel Quinn came under fire for failing to take a stand against China’s repression in Hong Kong. 

The head of the multinational banking giant was accused by UK politicians of “aiding and abetting” in “one of the biggest crackdowns on democracy in the world.”

Quinn was grilled about why HSBC blocked the accounts of Hong Kong democracy activist and legislator Ted Hui under the city’s draconian security law.

Conservative MP Andrew Rosindell described the London-based bank’s decision to cave in to Beijing’s sweeping security clampdown as “appeasement.”

In response, Quinn told the Committee that he could not “cherry-pick which laws to follow” in Hong Kong.

“It’s not my position to make moral or political judgments on these matters. I have to comply with the law … If we commit a criminal offense that puts us and millions of deposits at risk,” he said.

The facts:

  • HSBC was founded in Hong Kong during the 1860s and has its roots in the era of the British Empire.
  • Last June it created a storm when its Asia-Pacific CEO Peter Wong signed a “petition” backing the Beijing-imposed national security law in Hong Kong.
  • Pro-democracy protests rocked the city during the summer of discontent in 2019.
  • They flared up again last year as Beijing started dismantling the “One Country, Two Systems” model.
  • Activists involved in the democracy movement have been rounded up under the new security law.
  • HSBC has been accused of kowtowing to China’s ruling Communist Party to boost its bottom line.
  • The bank employs about 30,000 of its 235,000 global staff in Hong Kong and makes the bulk of its profits in Asia.

What was said: In a 90-minute exchange, Labour MP Chris Bryant accused HSBC of “aiding and abetting” the crackdown. “[HSBC seems to] adopt a moral stance when it suits [the company], but not when it doesn’t,” he added. Bob Seely, a Conservative MP and a vocal critic of China, continued that line of questioning. “No one is demanding HSBC walk away. But to avoid any conversation about values or ethical dilemmas was very poor,” he said after the session in an interview with Politico.

Reaction from HSBC: When asked by MPs whether the bank would ever deny a legal request on ethical grounds, Quinn said: “If you’re asking, am I willing to walk away from Hong Kong? The answer is no. We’re too committed through our history and heritage.” He also declined to comment on issues of “democracy or political” systems. “We had to ask 30,000 people to work from home because they were afraid to travel on public transport [in Hong Kong],” Quinn added as reported by The Guardian newspaper in London.

Between the lines: He did express “regret” to pro-democracy activist Hui, who fled to the United Kingdom from Hong Kong. In an email seen by the Financial Times, Quinn said: “I regret that HSBC is not able to operate your bank and credit card accounts.”

China Factor comment: HSBC or the Hongkong and Shanghai Banking Corporation has reaped all the benefits from having its headquarters in a transparent democracy with an independent judiciary. But it appears “moral” issues are quietly filed away when it comes to operating in cities controlled by authoritarian regimes, such as China’s ruling Communist Party. Still, the British-based bank is not alone. Major global brands have shown they are ready to go down the road of “appeasement” in China if it helps their profit margins. Only a consumer backlash in democracies across the world will change that.