For HSBC, Life Gets Very Complicated in Hong Kong & China, its Number One Market, as China Tightens the Screws

Amid concerns China’s authorities are using the account seizures to crack down on dissent.

HSBC has once again shown that it will do just about anything to secure continued access to China’s huge market. That includes freezing the assets of pro-democracy politicians and protesters.

The bank was one of three lenders that were accused this past weekend of freezing the bank accounts of former Hong Kong lawmaker Ted Hui and his family, who fled to the UK late last week. Hui was one of 19 pro-democracy lawmakers to resign following Beijing’s decision in November to disqualify HK lawmakers who weren’t deemed sufficiently loyal. He faces nine criminal charges in Hong Kong, including money laundering offenses, and is suspected of breaching Hong Kong’s recently imposed national security law.

After the story went viral, the accounts were mysteriously unfrozen for a number of hours, allowing Hui to transfer the family’s savings to somewhere “safe,” before they were frozen again on Monday.

On the same day, the Good Neighbor North District Church in Hong Kong, whose volunteers gave “humanitarian aid” to pro-democracy protesters, reported that its account with HSBC had also been frozen, along with accounts belonging to its pastor Roy Chan and his wife. Hours later, the church was raided by Hong Kong police.

These incidents have further dented HSBC’s already tarnished reputation, plunging the UK-registered bank back into the complex mire of geopolitics in Hong Kong. The timing could not have been worse, coinciding with the release of a second sanction list, this one by the UK, targeting Chinese officials responsible for disqualifying Hong Kong lawmakers deemed to be disloyal to Beijing. On the first list was the chief executive of the Hong Kong Special Administrative Region (SAR), Carrie Lam, who says she is stashing “piles of cash” at home since the measures prevented her from accessing basic banking services.

The U.S. Secretary of State Mike Pompeo has already accused HSBC and Standard Chartered of aiding China’s repression of Hong Kong. Despite being registered in the UK, where they are regulated by the Bank of England, both banks are first and foremost Asian banks. For that reason, they threw the full weight of their support behind China’s imposition of security legislation on Hong Kong in June. The law, imposing China’s security apparatus on the city, essentially sounds the death knell for Hong Kong’s “one country two systems” administration, which had been in place since the British handover to China in 1997 and was meant to afford the former British colony a high degree of autonomy until 2047.

The account seizures have also prompted many Hong Kong citizens to wonder just how secure their own bank accounts might be, amid rising concerns that Chinese authorities are using bank account seizures as a means of cracking down on dissent in Hong Kong. The Hong Kong Monetary Authority has done little to dispel this impression, arguing that the freezing of funds or property is simply the result of criminal investigations being conducted by HK police and banks are expected to cooperate.

Continue reading the article on Wolf Street

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