HSBC Bends The Knee To Beijing, Says It Will “Respect & Support” Security Law

Roughly a week after a former top CCP bureaucrat in Hong Kong hinted that it was time for HSBC to bend the knee and endorse the new “National Security” law imposed on HK by Beijing, the colonial-era bank has done just that, releasing a statement on Wednesday welcoming the new law, while continuing to

“We reiterate that we respect and support laws and regulations that will enable Hong Kong to recover and rebuild the economy and, at the same time, maintain the principle of ‘one country two systems'” HSBC said in a statement published online.

But the city’s oldest and largest bank, which is officially based in London, but derives the majority of its profits from the Hong Kong market, isn’t the only colonial-era corporate power in HK to kowtow to Beijing. Swire and Jardine Matheson, two other prominent British-based but Asia-focused companies, have already released statements of their own, with Jardine going as far as taking out an ad in a pro-Beijing newspaper.

Swire said the law “will be beneficial for the long-term future of Hong Kong as a world-leading business and financial center.”

This isn’t the first time HSBC has caved to Beijing: The bank stoked controversy by closing accounts linked to HK’s protest movement, and has persistently supported the regime, and opposed the pro-democracy movement in the past.

Analysts at some shops fear this stance, which is wildly unpopular in HK, could impact the bank’s business as locals turn elsewhere for their financing needs.

Hugh Young, managing director at Aberdeen Asset Management Asia, a large shareholder in the bank, said HSBC was “between a rock and a hard place.”

While Hong Kong will stay its biggest revenue generator, over time it could risk losing market share to Chinese banks, he added.

The position is also notably at odds with the stance taken by the UK’s conservative government, which has decried China’s encroachment on “one country, two systems”.

The irony is, no matter what HSBC says, once Beijing cements its control over HK and its economy, it will almost certainly be muscled out by Chinese rivals, which benefit from a home field advantage, and – of course – generous state backing.