China has been trying to impose a security law on Hong Kong that would make it a crime to undermine Beijing and allow people to be extradited from Hong Kong to the mainland. Opponents say the law would allow Beijing to impose its authoritarian rule on the region.
Attempts to pass the law in Hong Kong last year provoked widespread rioting. Beijing is now trying to bypass the Hong Kong legislature and instead impose the law unilaterally.
Governments around the world have condemned the move, which UK authorities say undermines the “one country, two systems” framework agreed when when Hong Kong was given over by Britain to China in 1997.
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The Financial Times reported on Wednesday that HSBC’s chief executive of the group’s Asian businesses, Peter Wong, had signed a petition supporting the new law. A spokesperson for Standard Chartered told the paper it also supported the law, which it said could “help maintain the long-term economic and social stability of Hong Kong.”
The banks’ support has caused uproar in Britain, where both banks are headquartered and list their shares.
Tom Tugendhat MP, who chairs the House of Commons Foreign Affairs Committee, tweeted that the banks were “choosing to back an authoritarian state’s repression of liberties and undermining of the rule of law.”
Alicia Kearns MP, who also sits on the Foreign Affairs Committee, said she would be asking HSBC and Standard Chartered to appear in parliament to explain “why they decided to back breaking of international law”.
Labour peer Lord Adonis branded HSBC’s support for the law “utterly disgraceful.”
“I intend to take this up with the chairman and chief executive of HSBC in London. And with HSBC’s major shareholders,” he tweeted.
HSBC was trending on Twitter in the UK on Thursday morning, with over 17,000 tweets were sent referencing the bank by lunchtime. Many people claimed they would shut their accounts with the bank in response to the move.
“Despite the fig leaf of corporate social responsibility & ethical conduct, too many corporations support dictators & murderous regimes in pursuit of profits,” Prem Sikka, professor of accounting at the University of Sheffield, tweeted about HSBC and Standard Chartered.
HSBC and Standard Chartered’s support for the law was also condemned internationally.
Rick Scott, a Republican senator for Florida, tweeted that HSBC had “chosen profits over human rights.”
“Siding with Communist China in its latest effort to deny autonomy and human rights to the people of Hong Kong is dangerous and shameful,” Scott wrote.
Hong Kong billionaire and pro-democracy campaigner Jimmy Lai said the bank had been “kowtowed” by China.
Joshua Wong, one of the most prominent leaders of pro-democracy campaigners in Hong Kong, tweeted: “HSBC provides a vivid example demonstrating how China will use the national security law as new leverage for more political influence over foreign business community in this global city.”
While both HSBC and Standard Chartered are headquartered in the UK, both banks are reliant on Asia for much of their revenue. HSBC in particular reaps the bulk of its profits from Hong Kong.
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A spokesperson for HSBC told Yahoo Finance UK: “We respect and support laws and regulations that will enable HK to recover and rebuild the economy and, at the same time, maintain the principle of ‘one country two systems.”
A spokesperson for Standard Chartered said: “We believe the national security law can help maintain the long term economic and social stability of Hong Kong.
“The “one country, two systems’ principle is core to the future success of Hong Kong and has always been the bedrock of the business community’s confidence. We hope greater clarity on the final legislative provisions will enable Hong Kong to maintain economic and social stability.
“We remain positive that Hong Kong will continue playing a key role as an international financial hub and Standard Chartered is committed to contributing to its continued success.”
Shares in HSBC were down 0.8% on Thursday, while Standard Chartered’s stock was up 0.8%.