UK Politicians’ Concern Over HSBC China Communist Committee
U.S. markets closed
  • S&P 500

    3,585.62
    -54.85 (-1.51%)
     
  • Dow 30

    28,725.51
    -500.09 (-1.71%)
     
  • Nasdaq

    10,575.62
    -161.88 (-1.51%)
     
  • Russell 2000

    1,664.72
    -10.21 (-0.61%)
     
  • Crude Oil

    79.74
    +0.25 (+0.31%)
     
  • Gold

    1,668.30
    -3.70 (-0.22%)
     
  • Silver

    19.01
    -0.02 (-0.13%)
     
  • EUR/USD

    0.9802
    -0.0017 (-0.18%)
     
  • 10-Yr Bond

    3.8040
    +0.0570 (+1.52%)
     
  • GBP/USD

    1.1120
    -0.0003 (-0.03%)
     
  • USD/JPY

    144.6340
    +0.1910 (+0.13%)
     
  • BTC-USD

    19,254.74
    +4.03 (+0.02%)
     
  • CMC Crypto 200

    443.49
    +0.06 (+0.01%)
     
  • FTSE 100

    6,893.81
    +12.22 (+0.18%)
     
  • Nikkei 225

    25,937.21
    -484.89 (-1.84%)
     

UK Politicians’ Concern Over HSBC China Communist Committee

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- British politicians have criticized HSBC Holdings Plc after a report that a Chinese communist party committee was set up at its local investment banking arm.

Most Read from Bloomberg

Chris Bryant, a former Labour government minister and member of the UK parliament’s foreign affairs committee, said the development should “worry” HSBC.

“I think they’ve been utterly complacent about it for some time, whether that’s because they want Chinese business, or something else, I don’t know,” Bryant told Bloomberg News.

HSBC, which is headquartered in London but makes most of its money in Asia, is obliged under Chinese law to allow the formation of a party committee if three employees who are members request it. The bank said in a statement that such groups had no influence on “the direction of the business, and have no formal role in the day to day activities of the business.”

The statement, which followed a Financial Times report about the creation of the committee, didn’t directly address whether such an entity had been set up. The bank didn’t immediately respond to requests for comment on the political reaction.

The bank raised its ownership in HSBC Qianhai Securities, which provides investment banking and securities services in China, to 90% in April. A spate of non-Chinese firms have taken majority or full ownership of their mainland brokerage operations over the past two years.

Bryant’s concerns were echoed by Alistair Carmichael, a British lawmaker in the Liberal Democrat party. “For a group that is headquartered in the UK to be accommodating the Communist Party of China in this way shows a woeful lack of governance and a woeful lack of judgement in the boardrooms that authorize this,” said Carmichael, who chairs a UK political group focused on Hong Kong.

Tom Tugendhat, a Conservative politician who was sanctioned by China last year after criticizing its human rights record, said the move at HSBC “is why many of us have been warning about the challenges of business in China.”

“As the CCP asserts its control over China’s economy, we’re going to see that those challenges aren’t easy to manage,” Tugendhat added.

Many international companies operating in China have at least one communist party committee. More than 80 such groups were formed in financial institutions active in Shanghai’s Lujiazui area in 2014, according to the local authority. Bryant said he was not surprised that a committee had been formed inside HSBC’s Chinese investment banking unit. “It’s the declared objective of every Chinese Communist Party member to do this,” he said.

Bryant questioned HSBC Chief Executive Officer Noel Quinn about the existence of communist party groups inside the bank last year. Giving evidence to the UK parliament’s foreign affairs committee, Quinn said he was not aware of the existence of party branches, adding that he did not “know the political affiliation of any one of the individuals who work for us.”

(Adds Tom Tugendhat comment in eighth paragraph.)

Most Read from Bloomberg Businessweek

©2022 Bloomberg L.P.