HSBC’s dominant and lucrative business position in Hong Kong “should not be taken for granted”, a former Hong Kong chief executive has warned, as pressure grows on the city’s businesses to declare their support for a contentious new national security law being imposed by Beijing.
“HSBC has been enjoying unique privileges in Hong Kong which should not be taken for granted,” Leung Chun-ying, who served as the Chinese special administrative region’s third chief executive, told the Financial Times in an email exchange on Friday.
Mr Leung has been one of the territory’s highest profile pro-Beijing figures for decades and was chief executive during the “umbrella revolution” protests that rocked Hong Kong in 2014.
In a Facebook post on Friday, Mr Leung criticised the UK for issuing a joint statement with the US, Canada and Australia which said the new national security law threatened Hong Kong’s “stability and prosperity”. In his post, Mr Leung slammed Britain for following the Trump administration’s lead in a statement that “interfered in China’s internal affairs”.
“HSBC has not yet declared its stance on national security law,” he added on Facebook, even though “HSBC’s profits come mainly from China.”
While Mr Leung stopped short of saying that he was calling for a boycott of HSBC in its most lucrative markets, he told the FT that he has “quite a few friends who are either closing the accounts or have stopped transacting”. He added that he used to have an account with HSBC “decades ago” but does not have “any accounts or other dealings with HSBC” at present.
A spokeswoman for HSBC declined to comment on Mr Leung’s views.
HSBC makes as much as 90 per cent of its profits in Asia and the vast majority of that in Hong Kong and mainland China. It is in the middle of the deepest restructuring in its 155-year history that will see it retreat from the US and Europe and become even more dependent on Asia for growth.
HSBC is also one of three banks, alongside Bank of China and Standard Chartered, allowed to issue banknotes in Hong Kong.
Mr Leung is now a vice-chairman of the Chinese People’s Political Consultative Conference, a Beijing advisory body that meets in parallel with China’s parliament. This year’s “two sessions” of the CPPCC and National People’s Congress was dominated by the latter’s announcement that it would impose a new national security law on Hong Kong.
The Chinese government argues the law is necessary to quell mass protests that erupted in Hong Kong last year. It has, however, been condemned by Hong Kong’s pro-democracy camp and overseas governments as the “death knell” of the wide-ranging autonomy that the former British colony enjoys under a 50-year, “one country, two systems” arrangement with Beijing.
Mr Leung also warned the British government that its opposition to the national security law could have wide-ranging consequences for its relations with China. “I am asking the UK to consider the possible responses of China, her enterprises and her people now that they have made the first move,” Mr Leung, who was Hong Kong chief executive from 2012 to 2017, told the FT.
A UK foreign office spokesperson responded: “We have urged China to reconsider the implementation of this law and live up to its responsibilities as a leading member of the international community.
“We hope they will listen carefully to the arguments we have made in public and private about the impact Beijing’s proposal would have on Hong Kong’s stability and prosperity.”
Sino-UK relations are likely to enter a turbulent period as Boris Johnson’s government considers removing equipment made by Huawei, the Chinese telecommunications company, from 5G networks.
In addition, Downing Street is scrutinising inward investment by Chinese companies and on Thursday announced it will consider plans to extend citizenship to more than 300,000 Hong Kong holders of British National (Overseas) passports.
As Hong Kong’s pro-democracy protests intensified last summer, often leading to clashes with police, the Chinese government’s representative office in the territory put pressure on local companies to issue statements condemning the violence, according to two people who received directives from the Central Liaison Office.
Cathay Pacific, the Hong Kong airline controlled by the British Swire family, was forced to sack its chief executive and another senior official after China’s aviation regulator said they had not acted swiftly enough to discipline a pilot accused of participating in a violent protest.
Such political pressure is likely to build again as the new national security law is drafted by the NPC and promulgated over coming weeks.
Earlier this week Hong Kong’s richest man, Li Ka-shing, issued a statement urging people not to “over-interpret” the potential consequences of the new national security law. “I hope that the central government’s [national security] worries about Hong Kong can be alleviated,” Mr Li said. “At the same time the [Hong Kong] government is duty-bound to consolidate the confidence of Hong Kong people in ‘one country, two systems’ and strengthen the trust of the international community.”
Last year Mr Li was attacked by the Chinese Communist party’s powerful Political and Legal Affairs Commission, which controls the country’s police and courts, and said his statement of concern about the civil unrest was too soft on the protesters.
Additional reporting by Nicolle Liu in Hong Kong, and Stephen Morris and Laura Hughes in London