Hong Kong’s Lam Praises HSBC After CEO ‘Grilled,’ Slams U.K.
(Bloomberg) -- Hong Kong leader Carrie Lam endorsed a stronger presence for HSBC Holdings Plc while hitting out at the U.K. for both disparaging the bank and failing to contain the coronavirus as Prime Minister Boris Johnson opens the door for millions of the territory’s residents to move.
In an interview Thursday with Bloomberg Television, Lam said she would “love” to see HSBC expand in Hong Kong, where it has come under increased criticism over freezing the accounts of activists and supporting the financial hub’s sweeping national security law. Lam also said China probably wouldn’t take action against lenders that comply with U.S. sanctions, which the law forbids.
“I don’t see why the Central People’s Government would take that sort of action,” Lam said. The Hong Kong chief executive added that her government “would continue to work with the banking industry in Hong Kong, not only to grow their business in Hong Kong, but also the Greater Bay Area, because that’s where Hong Kong’s strength lies.”
Lam has sought to convince multinational companies to stay in the territory even as the U.S., U.K. and other Western nations heap criticism on China for moving to silence democracy advocates following historic protests in 2019. Britain on Sunday will begin accepting visa applications for as many as 2.9 million British National (Overseas) passport-eligible Hong Kong residents as well as their dependents, who together make up almost 70% of the city’s population.
Lam said she didn’t see how that many people would want to move to the U.K., noting that its National Health Service was under “tremendous pressure” while praising Hong Kong’s hospitals. Still, she said she would respect the decisions of anyone who wanted to move and said the government needed to work to improve their lives.
Hong Kong’s government has embraced integration with China since the unrest hit the city, promoting the Greater Bay Area concept that seeks to create a Silicon Valley-style regional economic zone with the nearby mainland cities of Guangzhou and Shenzhen. In a meeting with Lam on Wednesday, President Xi Jinping praised her while saying Hong Kong must be governed by “patriots.”
Lam’s comments on HSBC came after she said Chief Executive Officer Noel Quinn was “grilled” for complying with Hong Kong law. On Tuesday, he defended the bank’s move to freeze a former Hong Kong lawmaker’s when questioned by U.K. parliamentarians.
Quinn said the decision was purely driven by the need to comply with local laws, and that he wasn’t in a position to make a “moral or political judgment” on such matters, he said. He also said he was “trying to stay out of the politics of one country versus another and do the right thing by our customers.”
The London-based bank, which counts Hong Kong as its largest market, has been caught in the midst of growing tension as China tightens control over the former British colony. The bank has faced criticism in China for cooperating with the investigation into Huawei Technologies Co., and drawn rebukes in Washington and London after its top executive in Asia last year publicly endorsed a controversial security law imposed on the city.
China is key to the bank’s turnaround plans, which include shifting billions in capital to expand in Asia and cutting back in Europe and the U.S.
Lam called Hong Kong’s regulatory regime “rule based” in contrast to what she called “politically driven” sanctions from the U.S. She said she understood why people and companies were considering alternatives to the territory, but said “the money has not moved yet.”
“Hong Kong will continue to strengthen our competitiveness in order to attract more capital,” she said.
Official data on Friday will likely show Hong Kong’s economy shrank a record 6% in 2020, the second consecutive year of contraction, according to economists surveyed by Bloomberg. The city is set to unveil its budget in February.
Lam said Hong Kong’s economy has a very good chance of achieving positive growth this year, subject to the course of the pandemic. She pointed to improving export and import growth figures in the latter half of last year as signs of a recovery and said spending at retailers and restaurants will pick up once virus restrictions are lifted. Lam said there was a need to stimulate the economy to create jobs.
Lam continued to defend the security law, saying it did allow for political opposition in Hong Kong as long as nobody crossed a “red line.” When asked if she would seek a second term in 2022, she said: “I’m not answering that question.”
©2021 Bloomberg L.P.