HSBC, one of the world’s biggest banks, has said that Chinese Communist Party (CCP) branches at private firms in China have no influence on business operations, following reports that a CCP committee was established at one of the bank’s units.
CCP branches are “common and can be set up by as few as three employees” and have no role in day-to-day business activities, HSBC said in a statement on Thursday.
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The bank, which has its headquarters in London but makes most of its revenues in Hong Kong and mainland China, did not comment on whether a CCP branch had been set up at one of its units.
HSBC released the statement after the Financial Times newspaper reported that the lender’s Chinese investment bank, Qianhai Securities, had established a CPP committee.
The report cited two people familiar with the matter.
Chinese law requires the establishment of a CCP committee at private companies, although the rule has not been widely enforced among foreign financial firms. The committees function as both workers’ unions and a way through which the party can install its representatives within the company ranks.
HSBC did not provide details on the number of staff who may be members of any such branch but said it does not monitor the political affiliations of employees.
HSBC’s move is set to pressure other foreign banks in China to establish CCP branches, the Financial Times reported, with some already exploring whether they are required to do so after taking full ownership of their mainland securities and brokerage operations in the last two years.
HSBC in April raised its stake in Qianhai Securities from 51 percent to 90 percent.