HSBC Holdings PLC (LON:HSBA) has said it will make new investments in mainland China despite suffering blowback for its support of controversial national security laws imposed on Hong Kong by the country’s communist government.
The FTSE 100 banking giant said it will establish a financial technology firm in China, while its life insurance-focused joint venture will hire more staff to create a wealth management unit for customers in the cities of Guangzhou and Shanghai.
HSBC is looking to grab a market share of China’s rapidly expanding upper and middle class, however, the bank and its fellow Asia-focused peer Standard Chartered PLC (LON:STAN) are facing growing international criticism for their support of recently enacted national security legislation in Hong Kong which followed prominent pro-democracy protests in the territory.
The law bans activities in Hong Kong that are deemed to be subversive or promoting secession from the mainland, however human rights groups and politicians around the world have voice concerns that the legislation is so broad that it can effectively criminalise any kind of protest activity in the city. The legislation has also been declared as a breach of the Sino-British Joint Declaration, a treaty signed between China and the UK to transfer governorship of Hong Kong to the mainland in 1997.
Concerns also focus on the possibility that those prosecuted under the new law could be extradited to mainland China to face its opaque justice system.
HSBC and other banks were also singled out for criticism on Thursday by foreign secretary Dominic Raab, who told Parliament that the “rights and the freedoms and our responsibilities in this country to the people of Hong Kong should not be sacrificed on the altar of bankers’ bonuses”.
Shares in HSBC fell 1.9% to 381.9p in late-afternoon trading on Friday, while Standard Chartered was down 2.8% to 429.7p.