Commentary on Political Economy

Tuesday 8 August 2023

UK Lawmakers Criticize HSBC After Executive’s China Remarks

  • HSBC’s Cowper-Coles said ‘weak’ UK follows US on China policy
  • Ex-Tory leader Duncan Smith says HSBC has ‘lot to answer for’

Sherard Cowper-Coles

Photographer: Chris Ratcliffe/Bloomberg

HSBC Holdings Plc drew criticism from British lawmakers after its head of public affairs accused the UK government of being “weak” by following US policy on China.

Sherard Cowper-Coles told a private event in London in June that the UK would often bow to the demands of Washington and had been strong-armed into cutting back business dealings with China. He apologized for “any offense caused” in a statement that said his were “personal comments.” The bank reiterated in its own statement that the comments were his personal views.

Nevertheless, two China critics in the UK’s governing Conservative Party — who have both been sanctioned by the Asian nation — slammed the London-listed bank, Europe’s largest. Former Tory Party leader Iain Duncan Smith said HSBC “have an awful lot to answer for,” while fellow backbencher Tim Loughton branded the lender an “apologist” for the Chinese government.

“Perhaps HSBC should get on with putting their own house in order before criticising others, not least when their actions over the last two years suggest their willingness to act first in the interests of an autocratic communist state,” Alicia Kearns, chair of the UK Parliament’s foreign affairs select committee, told Bloomberg News.

The remarks expose a growing rift in the Tory Party between Prime Minister Rishi Sunak, who has sought to preserve and grow trading links with the world’s second-largest economy, and those in his party who are suspicious President Xi Jinping’s regime. They want Britain to reduce ties with China over disputes ranging from the Covid-19 pandemic to its treatment of Uyghur Muslims and its stance on Russia’s invasion of Ukraine.

“Increasingly HSBC has become an apologist for the totalitarian Chinese Communist Government,” Loughton said. Cowper-Coles’s comments suggested a “kind of arrogant complacency where principles and regard for human suffering kowtow to business opportunity.” That, he warned could encourage an “emboldened China to bulldoze aside international rule of law and to buy international influence.”

Read More Stories About The UK and China

Cowper-Coles told attendants at a closed-door event in London in June that the UK shouldn’t blindly follow the US but rather look after its own interests, according to the people familiar with the matter, who asked not to be identified because the event was private.

The HSBC employee, a former diplomat, is acting like “the worst sort of apologist, blind to the outrages that the Chinese government commits against its people,” Duncan Smith said. “He cannot separate his personal views from HSBC because he is an adviser to HSBC. Now we know what he is advising them,” he added.

Luke de Pulford, executive director of the Inter-Parliamentary Alliance on China, which counts several China hawk British lawmakers as members, also criticized the comments by Cowper-Coles, saying such “diplomatic pragmatism” belonged in the past and reflected an obsession with trade over everything else.

Still, Vince Cable, the former leader of the Liberal Democrat party and business minister, said in a Bloomberg Radio interview that “deferring excessively to pressure from the United States is unhelpful to the UK and not in our interests.”

It isn’t the first time British politicians have taken aim at HSBC. In June, the bank was criticized by the UK parliament’s Foreign Affairs Select Committee and the US Congress Select Committee on China after the bank denied some Hong Kong expatriates access to their retirement funds. British politicians also spoke out after a report that a Chinese communist party committee was set up at HSBC’s local investment banking arm.

Sunak and Foreign Secretary James Cleverly have described China as an “epoch-defining challenge” to UK security, accusing Beijing of running secret police stations in Britain. Nevertheless, in an illustration of the premier’s outreach to China, the British and Chinese governments are reviewing dates for a visit by Cleverly to the country, after a planned July trip was postponed.

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