HSBC is the biggest loser in the endless global power game between the United States and China | Larry Elliot | Business

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In many ways, HSBC is no different from any other bank. Plunging activity means that loans are down, more money is set aside to cover losses and profits are reduced.There is, however, one crucial difference between Europe’s biggest bank and its rivals: HSBC makes more than half of its profits in Hong Kong – and that makes life pretty uncomfortable right now. Part of the reason the bank’s share price is trading at levels last seen before the transfer from the former British colony to China in 1997 is due to the state of the global economy. , but also has a lot to do with world politics.

Put simply, HSBC is caught in the midst of an escalating cold war between Washington and Beijing and has succeeded in turning both sides upside down.

In 2018, the bank provided documents to US authorities that led to the arrest in Canada of the chief financial officer of Chinese tech giant Huawei. This has infuriated Beijing, which does not appear to have been appeased by HSBC’s decubitant decision to provide a public demonstration of support for China’s new law to crack down on security in Hong Kong. Americans, however, are crazy and make all kinds of minor noises. Washington could make life extremely difficult for HSBC in the United States.

Boris Johnson can probably understand how HSBC Managing Director Noel Quinn feels. Much like the bank, Britain made a strategic decision when David Cameron and George Osborne ran the show that it made sense to do business with a fast-growing economic superpower. The assumption – shared by HSBC and the UK government – was that it was possible to be on good terms with the US and China, and that was not a matter of either. .

It all seems a long time ago. The struggle between the United States and China may have started with a struggle over tariffs, exports, and trade regimes, but has since expanded to include human rights, national security, and merits. different models of capitalism.

There is no indication that the competition will end even if Joe Biden defeats Donald Trump in the November presidential election, which is bad news for the global economy, bad news for the UK and bad news for HSBC.

Working from home: why the government is hot under the collar

It wasn’t that long ago that many companies had a dislike of their staff working from home. Managers felt they had to keep an eye on what the workers were doing. Otherwise, there would be industrial scale skiving, which would affect the bottom line.

It took a global pandemic to change the mindset of business. Businesses have found, perhaps to their surprise, that these WFH members are actually sitting at their computers rather than slouching towards the park, shops or golf course. Many of them wonder why they paid so much for office space when modern technology allows teams to stay in touch through Zoom calls.

These days, it is the government, rather than businesses, that insists people return to their desks and it is not hard to see why. Business districts look like ghost towns and this has a significant ripple effect on a range of businesses: sandwich shops, pubs, shops and minicab.

Earlier this month, ministers allowed companies to order their employees to return to the office provided it was safe. Yet, against the backdrop of imposing local restrictions and as the government itself stokes fears of a second wave of Covid-19, companies will inevitably be cautious.

More mixed messages on obesity

The big thing for the government last week was Boris Johnson’s campaign to fight obesity. This week’s wheezing is Rishi Sunak’s “Eat to Help” initiative whereby on certain days in August we can all get 50% off a burger and fries or pizza. Just a tiny contradictory message, maybe?

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