US attacks 'fealty' of HSBC as it urges UK to ditch Huawei

Oscar Williams-GrutSenior City Correspondent, Yahoo Finance UK
Yahoo Finance UK
US secretary of state Mike Pompeo: 'The United States stands with our allies and partners against the Chinese Communist Party’s coercive bullying tactics'. (Nicholas Kamm/Pool Photo via AP)
US secretary of state Mike Pompeo: 'The United States stands with our allies and partners against the Chinese Communist Party’s coercive bullying tactics'. (Nicholas Kamm/Pool Photo via AP)

US secretary of state Mike Pompeo has condemned HSBC (HSBA.L) for supporting China’s Hong Kong security law, as the controversy over the bank’s position deepens.

Pompeo issued a statement on Tuesday criticising HSBC for supporting the law, which has been widely condemned both in Hong Kong and internationally.

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China has been trying to impose a security law on Hong Kong that would make it a crime to undermine Beijing and would allow Hong Kongers to be extradited to the mainland.

Read more: Backlash over HSBC's support for China's Hong Kong security law

Opponents say the law would allow Beijing to impose its authoritarian rule on the region. Pompeo said it would “destroy Hong Kong’s autonomy and to break commitments made in a UN-registered treaty”.

It emerged last week that Peter Wong, the head of HSBC’s Asian business, had signed a petition supporting the new law. Standard Chartered, another UK-headquartered bank, has also come out in support of the security law.

“That show of fealty seems to have earned HSBC little respect in Beijing, which continues to use the bank’s business in China as political leverage against London,” Pompeo said.

HSBC's Asia chief executive Peter Wong pictured in 2019. (Ross Kinnaird/Getty Images)
HSBC's Asia chief executive Peter Wong pictured in 2019. (Ross Kinnaird/Getty Images)

Pompeo said HSBC had succumbed to “browbeating” by China and it decision to support the law was an example of “corporate kowtows”.

Read more: UK banks brace for £6.7bn COVID-19 hit

The broadside came as the US secretary of state condemned what he called China’s “attempted coercion of the United Kingdom”.

“The United States stands with our allies and partners against the Chinese Communist Party’s coercive bullying tactics,” Pompeo said.

“In the latest example, Beijing has reportedly threatened to punish British bank HSBC and to break commitments to build nuclear power plants in the United Kingdom unless London allows Huawei to build its 5G network. Shenzhen-based Huawei is an extension of the Chinese Communist Party’s surveillance state.”

Read more: Boris Johnson defies Trump to give Huawei 5G green light

Pompeo and the US have repeatedly pushed the UK to block Huawei from working on its 5G network, citing national security concerns. Prime minister Boris Johnson ultimately decided to allow Huawei a limited role working on the infrastructure but recent press reports suggest he could be reconsidering the decision. The Sunday Times reported that the PM had changed his mind.

Earlier this week Huawei took out full page ads in most of Britain's major newspapers defending its role working on UK 5G. (Ng Han Guan/AP Photo)
Earlier this week Huawei took out full page ads in most of Britain's major newspapers defending its role working on UK 5G. (Ng Han Guan/AP Photo)

”The United States stands ready to assist our friends in the UK with any needs they have, from building secure and reliable nuclear power plants to developing trusted 5G solutions that protect their citizens’ privacy,” Pompeo said.

“Free nations deal in true friendship and desire mutual prosperity, not political and corporate kowtows.”

Read more: Boris weighs security, trade, and tech in crunch Huawei 5G decision

Huawei and HSBC did not respond to requests for comment in time for publication.

HSBC stock came under pressure in London on Wednesday morning, falling 0.8% in a rising markets.

Earlier this week Huawei took out full page ads in most of Britain’s major newspapers defending its role working on UK 5G.

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