The Chinese government has given a positive response to HSBC Holdings, a Hong Kong-listed British bank, which recently said it hoped to explore business opportunities in Shanghai and other parts of the mainland.
A senior HSBC official said recently that Shanghai was the frontrunner.
Shanghai had an advantage and a pioneer status to stay resilient and adapt to new situations due to its strong connections with other regions and a smooth investment system for technology and infrastructure projects, Mark Tucker, the group chairman of HSBC Holdings, said in a speech at the annual conference of the International Business Leaders’ Advisory Council for the Mayor of Shanghai on October 18.
Tucker said he was bullish on Shanghai’s prospects as the financial hub was pushing the development of its innovation, startup, digital technology and sustainable sectors.
With the continuous opening-up of China’s financial markets, many companies enjoyed a significant growth in their businesses, Tucker said. China’s fintech and innovative technology also provided valuable opportunities for international financial institutions.
HSBC would proactively participate in the construction of Shanghai’s “five centers,” which refer to the plan to develop the economy, finance, trade, shipping, and scientific and technological innovation over the next five years.
The plan would contribute to the further opening-up and development of China’s financial markets, he said, adding that the bank was looking forward to expanding business in Shanghai and larger Chinese cities.
Tucker suggested that Shanghai build a communication and information exchange network with cities along the Belt and Road, set up project standards to attract private investment and further promote financial innovations. He said the Belt and Road Initiative did not only need bridges and roads, but also high technology, to achieve economic integration.
HSBC’s plan to expand in mainland China was first welcomed by the Global Times, a state-run English tabloid affiliated with China’s Communist Party, which on Tuesday tweeted Tucker’s speech with a picture with a HSBC logo.
“China is continuing to promote reform and opening up, and strive to create a better business environment, which will create more opportunities for international business, including HSBC,” Liu Xiaoming, the Ambassador of China to the United Kingdom, said Wednesday on Twitter, citing the Global Times’ message.
Liu’s latest message has been seen as a friendly gesture from China to HSBC. Global Times chief reporter Chen Qingqing wrote in a September 19 tweet that HSBC would probably be among the firms put on the Chinese Ministry of Commerce’s entity list. Prior to this, HSBC was accused by Chinese media of presenting misleading evidence that resulted in the arrest of Meng Wanzhou, chief financial officer of Huawei Technologies, in Canada.
Shares of HSBC have dropped by more than 50% to HK$27.5 (US$3.55) on September 23, their lowest level since 1995, from the HK$60 level at the beginning of this year.
Last month, China’s Ping An Asset Management bought 10.8 million shares for HK$305 million, or HK$28.29 per share. The shares closed up 0.64% at HK$31.25 on Thursday.
The rumours that HSBC could be put on China’s entity list and sanctioned by the United States had been exaggerated, said Pun Tit-shan, vice-chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators. Once the pandemic started to ease, HSBC’s share performance would improve, Pun said.
Pun added that HSBC’s profits mainly came from the Asia region, which had controlled the virus better than other regions. He said HSBC could resume its dividend payout if it continued to boost its efficiency.
On October 14, Mike Pompeo, the United States Secretary of State, submitted a report to the US Congress identifying foreign persons who are materially contributing to, have materially contributed to, or attempt to materially contribute to the failure of China to meet its obligations under the Sino-British Joint Declaration or Hong Kong’s Basic Law.
The State Department named 10 individuals, including Chief Executive Carrie Lam, all of whom have already been sanctioned, and said it would identify financial institutions that conduct significant transactions with them within 60 days.
HSBC and Standard Chartered had previously been tipped as the candidates that would be sanctioned by the US as they publicly supported Beijing’s national security law for Hong Kong in June. Some analysts said the two banks would probably be safe in the short term as sanctions on them would disrupt global financial markets as well as the US presidential election.
On Thursday, two iconic lion sculptures at the entrance of HBSC’s headquarters in Central have reappeared in public after they were spray-painted and briefly set alight by anti-government protesters on New Year’s day, RTHK reported.
The two bronze lion statues, known as Stephen and Stitt, have stood at the Des Voeux Road entrance of the bank since 1935.
“Stephen and Stitt have watched over HSBC Main Building for 85 years. Through good times and bad, they have been an enduring part of Hong Kong’s story. Many customers, employees and the general public told us how much they missed the lions,” said Peter Wong, HSBC’s deputy chairman, said in a ceremony to relaunch the statues.
“So we decided to put them back on display following the first phase of restoration. When the work is complete, they will look as impressive as ever”, he said.
The bank said there had only been a basic restoration so far as overseas experts have been unable to travel to Hong Kong due to the Covid-19 pandemic.