Bowing to Beijing: Pompeo berates HSBC for backing Hong Kong law

US Secretary of State Mike Pompeo has chided British bank HSBC for backing moves by China to impose a national security law in Hong Kong, a move seen by many critics of Beijing as a threat to the Chinese city’s semi-autonomous status.

Pompeo said on Tuesday that such “corporate kowtows” got little in return from Beijing.

He added that the United States stood ready to help the United Kingdom with alternatives after Beijing reportedly threatened to punish HSBC and break commitments to build nuclear power plants in the UK unless it allowed China’s Huawei Technologies to build its 5G network.

“The United States stands with our allies and partners against the Chinese Communist Party’s coercive bullying tactics,” Pompeo said in a statement, his latest swipe at China’s governing party.

Pompeo said the party’s “browbeating” of HSBC “should serve as a cautionary tale” and referred to the bank’s Asia-Pacific CEO, Peter Wong, signing a petition supporting Beijing’s plans to impose new security legislation on Hong Kong.

“That show of fealty seems to have earned HSBC little respect in Beijing, which continues to use the bank’s business in China as political leverage against London,” he said.

Last week, HSBC said it “respects and supports all laws that stabilise Hong Kong’s social order”, while its rival Standard Chartered said it believed the law could “help maintain the long-term economic and social stability of Hong Kong”.

Senior British and US politicians have criticised the banks for their statements. 

Both UK-based banks derive the majority of their revenues or profits from Asia and have a significant presence in Hong Kong.

On Tuesday, David Cumming, chief investment officer at Aviva Investors – one of the largest shareholders of the banks – said he was “uneasy at the decisions of HSBC and Standard Chartered to publicly support the proposed new national security law in Hong Kong without knowing the details of the law or how it will operate in practice.”

Last month, China’s parliament announced and quickly approved a resolution that would impose legislation on Hong Kong criminalising the harshest criticism against the government. 

Pompeo said at the time that Beijing’s enactment of the new law would mean the US has no reason to treat Hong Kong more favourably than mainland China. Pompeo has already decertified the former British colony’s autonomy under US law, which may have potentially serious trade consequences.

US-China ties have deteriorated rapidly since the start of the year over the coronavirus pandemic and Hong Kong. Washington sees Huawei as an extension of the Chinese government and has urged European allies to exclude it from mobile networks.

Pompeo said Australia, Denmark, “and other free nations” had faced pressure from Beijing, and it showed why countries needed to avoid economic overreliance on China and to guard their critical infrastructure from Beijing’s influence.

“Free nations deal in true friendship and desire mutual prosperity, not political and corporate kowtows,” he said.

The UK’s Daily Telegraph newspaper reported on Saturday that HSBC Chairman Mark Tucker had warned the British government against a ban on networking equipment made by Huawei, claiming the bank could face reprisals in China.