Quinn, an HSBC lifer who officially took over as chief executive in March, will likely choose his words carefully. HSBC has traditionally remained neutral on China, but it was under Quinn’s watch in early June that the bank lent its support to Beijing’s new rules. He said, “We respect and support the laws and regulations that will allow Hong Kong to recover and rebuild the economy and, at the same time, maintain the principle of ‘one country, two systems’.” Peter Wong, HSBC Managing Director for Asia-Pacific, signed a petition supporting Beijing’s new rules.
The post immediately sparked controversy, with politicians in London and Washington condemning the bank’s support for undemocratic laws that critics said would undermine Hong Kong’s autonomy under one country, two systems.
Labor MPs berated HSBC, saying the laws it openly supported violated the UK-China Joint Declaration Treaty commitments and limited the freedoms of Hong Kong citizens. They also warned that the bank was at risk of boycotts similar to those aimed in the 1980s at companies that continued to do business in South Africa during the apartheid era.
Foreign Minister Dominic Raab later told parliament that the rights and freedoms of Hong Kong citizens “should not be sacrificed at the altar of bankers’ bonuses.”
In Washington, the House of Representatives passed a law targeting key Chinese officials, exposing banks that do business with Chinese authorities to sanctions. This came weeks after US Secretary of State Mike Pompeo called HSBC’s approval of the security law a “corporate kowtow”.
Pompeo claimed that HSBC’s efforts had been in vain and earned it no respect in Beijing, after China allegedly threatened to punish the bank if the UK blocked tech company Huawei from getting involved in building the its 5G network. He warned that HSBC would continue to be used as political leverage by the Chinese Communist Party.
The tit-for-tat retaliation between the west and Beijing continues, and HSBC is still caught in the middle, even if it remains on the low side. In July, China Global Times The newspaper – a spokesman for the hawkish state – said China would oppose UK measures to suspend an extradition treaty with Hong Kong by targeting companies such as Jaguar Land Rover and HSBC.
Last week, HSBC was forced to dismiss Chinese state media claims that it had tricked Huawei and was complicit in US efforts to arrest its CFO, Meng Wanzhou, in Canada at the end of 2018. In its statement , posted on WeChat Chinese social media platform, the bank said it only turned over documents to the US Department of Justice after being ordered to do so.
HSBC is now walking a precarious line between offending China – which is its most lucrative market – and the loss of support from the UK and other Western states.
Few of Quinn’s banking rivals would like to be in his place.