It is an obvious thing, not the more complex “banality of evil”. In the end, money dictates the law.
Beijing’s latest decisions regarding the autonomous province of Hong Kong (the illusion of one country, two systems) to apply China’s security laws made us cry out about Beijing’s incorrectness (which two systems??!!) for the invasion of the fundamental freedoms that he enjoyed in the final part of British colonization in Hong Kong and which he now sees disappearing.
All well and good, but there is something more that will ultimately guide its destiny: the economy, the money, the profits that the financial and commercial presence of large international giants produce in this special global financial center.
The behavior of two large global financial institutions such as the Hong Kong and Shanghai Banking Corp. (HSBC) and Standard Chartered Bank is making noise these days. Both banks have made it known that they are in favor of cracking down on the new security law that Beijing intends to implement.
HSBC’s top executive signed a petition in support of Beijing, in clear contradiction to the careful neutrality the bank has maintained over the last century. Unfortunately, the business of these two banks gives them no escape. Beijing knows this and can exert all the pressure it wants because it holds the bull by the horns.
Let’s see why, focusing on HSBC: the bank was founded by a merchant in 1865. Its headquarters were in Hong Kong and therefore it was highly privileged having control over the most important “gateway to China”. I remember meeting one of its top leaders, Sandberg, in Hong Kong in 1974. Absolutely an authority on knowledge of relations with China.
Since then the bank, following the needs of the times, has moved its headquarters to London, always maintaining a majority position of its business in HK and China.
It currently has assets worth 2.7 trillion dollars, 235 thousand employees and operates in 64 countries. A giant, but unfortunately with feet of clay because half of its revenues are in HK and 17% in China.
It is conceivable what would happen to the bank if it were to lose more than 60% of the dollars it collects (the same goes for Stanchart) thanks to Beijing.
Logical from a business perspective, but in many respects, an equally delicate argument. There are many pressures on management. First of all, he must be careful to be “politically correct” with the Chinese giant. It will have to coexist with Chinese security in HK, including the secret services that may be based there. Then the pressure from London which is not happy to see one of its subjects take Beijing’s defense in a moment of particular tension between London and Beijing and this for various reasons, such as the Coronavirus, the 5G dispute, the failure to respect the agreements on the return of HK to China, i.e. 50 years of special status with respect for democratic rules.
Last but not least, the two banks have thousands of employees who will be absolutely against “appeasement” towards Beijing and who will be afraid when they want to demonstrate that they will be fired. This is why morale in the two banks is said to be low and they have no way out. Beijing is very nervous about the Hong Kong issue. A possible loss of control of the autonomous province would have, in addition to large economic losses, also possible repercussions on other possible disputes (Uyghurs, Tibetans and the claim to Taiwan).
No, Hong Kong is not negotiable and for those who operate there and make large profits the rule “either with us or out of the country” applies. Foreign banks therefore have no choice.
It follows the eternal story of our world, the “comes first” economy and is prevalent over everything.
Although unpleasant and unpleasant, it is nevertheless the inevitability of the weight of the economy on those values that many of us would instead like, perhaps utopistically, to see triumph.
Vittorio Volpi
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How do the economic interests of financial institutions in Hong Kong influence their stance on human rights and democratic values in the context of China’s security laws?
Thank you for accepting our invitation for this interview. To begin with, we would like to discuss the recent developments in Hong Kong and China’s security laws. As discussed in the article, the economy plays a significant role in shaping the decisions made by large financial institutions such as HSBC and Standard Chartered. How important do you think economics is in shaping international relations, particularly in relation to human rights and democratic values?
Our second topic is the role of these financial institutions in Hong Kong. The article mentions that HSBC and Standard Chartered face pressure to maintain their stronghold in Hong Kong due to their significant revenue generated from the region. Do you think there is a moral dilemma for these banks in prioritizing profits over supporting democratic values?
we would like to discuss the wider implications of the situation in Hong Kong. As the article states, the Chinese government sees the region as a key part of its economy and global influence. How do you think this will impact relations between China and other countries, particularly those with their own financial interests in Hong Kong? And, where do you see Hong Kong’s future heading in light of these developments?
