British financial services company Standard Chartered Plc and UK bank HSBC have both endorsed China’s proposed security law for Hong Kong, with Standard Chartered plc explaining that the authoritarian law would “help maintain the long-term economic and social stability” of Hong Kong. The Chinese Communist Party’s official news platform, the Global Times, gave a veiled threat to British companies, such as HSBC, that if they chose to ally themselves with US and UK interests concerning the Huawei 5G rollout and the Hong Kong Security Law there would be consequences. On Tuesday the Global Times declared that if HSBC were to side with UK and US interests, “its image would bear an indelible stain and likely that its Chinese business would take a hit”.
The publisher added: “Given its reliance on Chinese profits, it will be a life-or-death test for HSBC.
“And whether or not the bank can overcome its dilemma will really test the political wisdom of its management.”
The newspaper, that is an integral part of the party, ended its diatribe by stating: “We don’t want to see such a big bank hit hard for political reasons, but companies need to pay the price for the choices they have made.”
Speaking to Express.co.uk, Mathew Henderson, director at the Asia Studies Centre of the Henry Jackson Society, said: “Clearly HSBC and Standard Chartered are in no good position to resist Beijing’s pressure, since both now make so much money inside the PRC; but it is still profoundly worrying to see two famous institutions, which owe their very existence to a previously free Hong Kong, being forced to support undemocratically-imposed legislation whose purpose is to destroy that same freedom.”
British firms take warning from Beijing
In a statement made last week, Standard Chartered PLC said: “The ‘one country, two systems’ principle is core to the future success of Hong Kong and has always been the bedrock of business community’s confidence.
“We hope greater clarity on the final legislative provisions will enable Hong Kong to maintain economic and social stability.”
On Tuesday, Andrew Rosindell MP voiced many parliamentarian’s “concern and surprise” at HSBC and Standard Chartered PLC’s support of China’s newly proposed National Security Law in Hong Kong.
The MP was the lead sponsor of an Early Day Motion to press Parliament over concerns at the UK companies support for the law.
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Mr Rosindell said: “It is time we stand up and honour our duty to Hong Kong.
“We cannot let UK owned and run businesses put profits above human rights and fundamental freedoms.
“The actions of HSBC and Standard Chartered PLC undermine and devalue the UK’s political warning shots fired at China.
“We cannot simultaneously scorn and invest in a regime that so overtly breaches human rights laws.
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“More must be done and action must now be taken against these companies if we are to truly, consistently and meaningfully oppose the bully that is China”.
The Early Day Motion was signed by eleven cross-party MPs who have called on the Government to set forth measures to encourage HSBC and Standard Chartered Plc to review their support for National Security Law for Hong Kong, which will effectively criminalise freedom of expression in the city.
Last week Beijing denounced British bank HSBC for supposedly funding “terrorists”.
By “terrorists” central communist authorities mean citizens involved in the pro-democracy demonstrations in Hong Kong.
Chinese authorities then announced that HSBC had capitulated to their demands and were closing the accounts of those involved in Hong Kong pro-democracy protests.
In a statement sent to The Global Times, HSBC said: “As part of our responsibility to know our customers and safeguard the financial industry, we regularly review our customers’ accounts.
“If we spot activity differing from the stated purpose of the account or missing information, we will proactively review all activity, which can also result in account closure.”
In response, The Global Times wrote: “These are the accounts that channel funds to terrorists.
Standard Chartered PLC
“Some hailed the action by the bank while others said that the bank is too late.
“They termed the bank’s previous inaction a fence-sitting tactic.”
British banking giant HSBC reportedly makes most of its profits in the Hong Kong financial services market.
Trades through the banking sector of Hong Kong contributed more than 80 percent to the company’s profits during the first quarter of 2020. This is according to HSBC’s quarterly reports.
China has vast foreign currency reserves
71 of the world’s 100 largest banks have large bases in Hong Kong.
The city’s banking sector is the ninth-largest in the world and is the second-largest in Asia after Japan.
Beijing knows many financial institutions cannot do without the profits made through the Hong Kong banking sector.
HSBC was contacted to respond to the claims in the article but have yet to reply.