HSBC’s most recent TV ad campaign is a montage of lush, slow-motion footage of stalwart everyday #heroes stacking shelves, shouldering bags of grain and politely asking people to queue for shops. “We are not an island”, intones Sandi Toksvig over footage of a softly gleaming Britscape, “we are part of something far, far bigger”.
The bank expressed a similar sentiment on WeChat, China’s ubiquitous social network, last night – except that this time, the place it considered to be “not an island” was Hong Kong, and the “something far, far bigger” was the criminal and security jurisdiction of the People’s Republic of China.
The post announces the bank’s public support for the national security law that Beijing is seeking to impose upon the special administrative region, and reveals that Peter Wong, chief executive of the bank’s Hong Kong subsidiary, has signed a petition in support of the new law.
Critics say the law will subject Hong Kong’s 7.5m citizens to the same authoritarian regime as the rest of China, placing severe limits on freedom of speech and assembly, and allowing Chinese security agencies to operate in the city. On 28 May, the governments of Australia, Canada, the UK and the US jointly released a statement expressing their “deep concern” at the law, which they said “lies in direct conflict with [China’s] international obligations”.
Many brands now take a moral stance in their advertising. Nike, for example, has won applause — and commercial success — for using its marketing to promote a more open and frank discussion of systemic racism. But while HSBC’s open support for the imposition of China’s terrifying security regime upon millions of people is certainly a political position, it’s not one that will have conscious consumers flocking to open accounts. So why do it?
The main reason is that the UK is not HSBC’s prime market. While the bank is headquartered in London, Asia is by far its biggest market. In February it announced a restructuring plan that involves “reshaping underperforming parts of the Group” in Europe, the UK and US, while moving “over USD 100 bn to higher returning areas” — namely China. The bank created 1,000 new jobs in China last year in its technology divisions, but the Covid-19 crisis has meant that its planned 35,000 job cuts elsewhere may go even deeper.
As I’ve written previously, western companies gain access to the world’s largest consumer market at a price. Leung Chun-Ying, the former chief executive of Hong Kong, made this abundantly clear in January when he told state media the bank needed to express a position on the national security law, and to appreciate “on which side their bread is buttered”.
And as the economist and China expert George Magnus wrote earlier this week, Hong Kong is strategically vital in what may be a coming “financial war” between China and the US. HSBC, and other British banks such as Standard Chartered, have been pressured to declare their allegiance early.
Will the eight million people who bank with HSBC and First Direct in the UK change their accounts in disgust? Perhaps not. British customers did not desert it in 2012, when HSBC Mexico was prosecuted in the US for failing to prevent drug cartels in Mexico and Colombia laundering $881 million. The drug war in Mexico is thought to have involved the murders of more than 60,000 people.
British customers stuck with the bank, too, when in the same year it was accused by the US Homeland Security Committee of “disregarding links to terrorist financing”, including the provision of over $1bn to a private bank in Saudi Arabia that was founded by “an early financial benefactor of al Qaeda”.
Nor did customers walk in 2014, when HSBC was fined £216 million by the FCA for having colluded with other banks to manipulate foreign exchange markets, or when its role in the Libor and Euribor scandals was revealed, or when the BBC’s Panorama accused it of helping the world’s wealthy avoid vast amounts of tax, or when Peter Oborne, then chief political commentator at the Daily Telegraph, resigned in protest at what he claimed was an attempt by the bank to gag the British press.
While switching bank accounts in the UK is the work of moments, thanks to the Current Account Switching Service, this has actually helped some of the larger banks, such as HSBC and Natwest, to gain tens of thousands of new customers by offering sign-up bonuses.
On Twitter last night a handful of people announced that they planned to close their accounts, and they were joined this morning by a smattering of political figures. But in general, HSBC appears to have calculated that not many of the nearly eight million people who bank with HSBC and its subsidiary, First Direct, in the UK care enough about the nearly eight million people who live in Hong Kong to make any change to their retail banking or wealth management services. On previous evidence, it’s probably right.
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