HSBC has a deep relationship with China, and its English name The Hong Kong and Shanghai Banking Corporation Limited shows its close relationship with Hong Kong and Shanghai. The original Chinese name of HSBC was "The Bank of Credit Suisse in Hong Kong and Shanghai", and it was changed to "The Hongkong and Shanghai Banking Corporation" in 188 1 year. It is said that the word "HSBC" was suggested by the Chinese comprador Gu Yingchun after calculating the good and bad strokes, taking its meaning of "abundant remittance". At the beginning of the 20th century, HSBC has become the largest bank in the Far East, and the foreign exchange traded by HSBC often accounts for 60%-70% of the Shanghai foreign exchange market. From the late Qing Dynasty to the Republic of China, HSBC Shanghai was the main collection agency for China government to repay foreign debts and indemnities, and the main bank to collect and keep China domestic debt funds and China customs duties on behalf of the General Taxation Department. 19 15 The total inventory of gold and silver in all Chinese and foreign financial industries in Shanghai was 80.99 million taels, of which Huashang Bank and Qianzhuang Bank accounted for 17.3%, other nine foreign banks accounted for 44.3%, and HSBC alone accounted for 38.4%. From its establishment to War of Resistance against Japanese Aggression, Shanghai has been the most important market for HSBC in the world.
1949 After the founding of New China, the branches of HSBC in Chinese mainland were closed one after another. Only the Shanghai branch continued to operate, and it was one of the few foreign banks with uninterrupted business in Chinese mainland. Hongkong and Shanghai Banking Corporation (China) Limited officially opened on April 2, 2007, and its head office is located in Shanghai, China. By 20 14, HSBC China * * * has 135 outlets and 29 branches are located in 29 cities including Beijing, Shanghai and Guangzhou. At present, HSBC's nearly 170 outlets cover 57 cities, about one third of which are located in Guangdong. It is the only foreign bank with outlets in all prefecture-level cities in Guangdong. At present, HSBC is the largest foreign bank with the largest number of outlets in the Mainland.
However, HSBC, which has deep roots in the China market, is now caught in a geopolitical game with China and the United States, and its cooperation with the United States to suppress Huawei is a focus.
On May 28th this year, the High Court of British Columbia ruled that the essence of Meng Wanzhou's case was "fraud". On the morning of July 24th, the court made public the evidence materials of the next trial of Meng Wanzhou extradition case. Judging from the public evidence, HSBC is suspected of being involved in framing and "manipulating". It provided materials about Huawei's business in Iran as evidence in exchange for the United States' pardon for HSBC's violations.
In the Record of Case Prosecution filed by the United States to the Canadian court, a key evidence is that Meng Wanzhou, CFO of Huawei, "concealed" the relationship between Huawei and Hong Kong Starlink Technology Co., Ltd. ("Hong Kong Starlink", or Skycom) from HSBC, and "misled" HSBC to continue to provide banking services to Huawei, resulting in HSBC violating the US sanctions against Iran. This means that Meng Wanzhou constitutes a "fraud" to HSBC. The "only key evidence" of this case is a PPT file handed over to HSBC by Meng Wanzhou, including the full text of PPT and the business email records of HSBC and Huawei. However, HSBC lied on the key point that it claimed that it did not know the relationship between Huawei and Skycom. According to the 2009/20 10 financial report sent by Huawei to HSBC, HSBC is fully aware of Skycom's business in Iran. HSBC claims that only "junior" employees are aware of the relationship between Huawei and Hongkong Xingtong, but these "junior" employees have not passed the relevant information to "senior" managers, resulting in HSBC executives relying on PPT provided by Meng Wanzhou to judge risks.
This statement is obviously untenable. On 20 12 12, HSBC signed a deferred prosecution agreement with the us department of justice for violating us sanctions against Iran. HSBC assured the U.S. Department of Justice that it would carry out inspection and clean-up work for customers of the whole group. In this process, HSBC still failed to identify the relationship between Huawei and Hong Kong Star Link, which is obviously illogical. On February 20 13, Hong Kong Xingtong closed its HSBC account, and the cooperation between Huawei and HSBC on Iran business ended here. But after that, HSBC still asked for "communication" with Huawei. In August of 20 13, Meng Wanzhou was invited to meet with the senior management of HSBC to explain Huawei's business in Iran. The PPT provided by HSBC was handed over to the United States, which became the key evidence for the United States to attack Huawei.
An important reason for HSBC to cooperate with the United States in cracking down on Huawei is its interests-in exchange for the pardon of HSBC by the United States by presenting evidence of Meng Wanzhou. In 20 12, the U.S. government accused HSBC of serious money laundering and financing of international terrorism, and HSBC paid a fine of1920 million dollars for it, and reached a five-year (20 12-20 17) Deferred Prosecution Agreement with the U.S. Department of Justice. HSBC agrees to "cooperate with the U.S. Department of Justice in any investigation", and the U.S. Department of Justice has the right to withdraw the agreement and file criminal charges with HSBC if it fails to fulfill the relevant requirements.
On September 20 16, the U.S. department of justice discussed whether to withdraw the deferred prosecution agreement and whether to sue HSBC for criminal charges. At the end of the same year, HSBC began to secretly investigate Huawei accounts. According to Reuters's report at that time, HSBC "cooperated" in submitting the investigation results of Huawei to the United States, "coincidentally" just before the agreement between HSBC and the US Department of Justice expired. Reuters's report clearly pointed out that HSBC began to "cooperate" with the investigation initiated by the US Department of Justice on Huawei from the end of 20 16 to 20 17, in exchange for the US Department of Justice's forgiveness for HSBC, because HSBC itself was involved in other cases that violated the US sanctions ban.
According to public information, from February to July, 20 17, HSBC actively cooperated with the US investigation of Huawei and made at least four statements to the US Department of Justice, and thousands of people were interviewed by the US Department of Justice. 20 171February, although the compliance supervisor of the U.S. department of justice thought that "HSBC's compliance still has great defects", the U.S. prosecutor unexpectedly withdrew all criminal charges against HSBC and ended the supervision of HSBC. From the time line and event line, from the meeting with Meng Wanzhou in 20 13, to the internal investigation of Huawei in 20 16, and to the termination of cooperation with Huawei in August 20 17 ... Through a series of operations, HSBC kept Huawei as a big customer and provided evidence of Huawei to the United States in exchange for the withdrawal of the accusation against it.
From the general business logic, a global financial institution that pursues interests should not subjectively "trap" its own big customers. However, the reality of HSBC is that it was caught by the US government because of a series of violations and had to cooperate with the US Department of Justice to investigate Huawei in exchange for the US government's "letting HSBC go". From the standpoint of the United States, HSBC needs to play a "tainted witness". As we all know, the US government's global investigation and suppression of Huawei is no longer a commercial interest or a violation of the sanctions ban, but a special "battle" for the United States to adjust its China strategy and contain China for a long time. In other words, the suppression of Huawei is part of the geopolitical action of the United States against China, and HSBC has been deeply involved.
In the face of China media accusing it of "framing" Huawei, HSBC issued a statement on its WeChat account in China, saying that it did not participate in the decision of the US Department of Justice to investigate Huawei. "The background of the development of Huawei incident clearly shows that the US investigation into Huawei was not triggered by HSBC" and "HSBC has no malice towards Huawei and has not framed Huawei". The statement also stated that "in response to the information requirements of the US Department of Justice, HSBC only provided factual information. HSBC does not' fabricate' evidence or' conceal' facts, nor will it distort facts or harm any customers for our own benefit. "
However, HSBC's statement evaded the point. The US Department of Justice initiated an investigation into Huawei, which is a well-known fact and does not need HSBC's explanation. The role, motivation and interest exchange of HSBC in this matter are the key points. The active cooperation of HSBC has undoubtedly played a key supporting role for the US Department of Justice to carry out the action against Huawei and use this as a reason to arrest Meng Wanzhou by Canadian hands.
At this sensitive time, the Shenzhen Banking Insurance Regulatory Bureau issued a reply on July 24th, agreeing that HSBC (China) Co., Ltd. should close Shenzhen Longgang Sub-branch (coincidentally, Huawei's headquarters is also in Longgang). The market is highly concerned about the future fate of HSBC. How will it be affected in China market? In this regard, the researchers of Anbang think tank have the following personal judgments:
First, it is difficult for HSBC to leave the China market. Unlike other western financial institutions, HSBC Holdings is registered in London, but its "historical and cultural registration place" is in China and Hong Kong, and its market is deeply rooted in the China market (including Hong Kong and the Mainland). According to the annual report of HSBC, the adjusted income of HSBC in 20 19 was USD 55.4 billion, and the adjusted pre-tax profit was USD 22.2 billion. In the Asian market, the adjusted revenue is $30.5 billion (accounting for 55% of global revenue); The pre-tax adjusted profit reached 186 billion USD (the total profit accounted for 83.8%). Among them, the adjusted pre-tax profit of Hong Kong market is 12 1 billion USD (accounting for 54.5% of the total profit). According to the first quarterly report of HSBC in 2020, Hong Kong contributed $ 46. 1 0.66 billion of the total revenue of the Group in the first quarter, accounting for 40%. Among the pre-tax profits of $3.23 billion, Hong Kong accounted for $2.85 billion, accounting for 88.2%.
Second, it will be difficult for HSBC to get rid of the status of "grinding the heart" in the Sino-US game. Hongkong has become the "grinding heart" of the game between the United States and China and the "outpost" of geopolitical game. It is difficult for HSBC, which is rooted in Hong Kong, to get rid of this situation. At the same time, due to market interests, it is difficult for HSBC to make a decision to withdraw from the China market. In the classification of foreign capital evacuated from China by ANBOUND, HSBC belongs to the category of "leaving and falling". It is difficult for HSBC to get rid of the geopolitical game between China and the United States, especially after the implementation of China's Port Security Law and the United States' Hong Kong Autonomy Act, the two countries will play a geopolitical game based on the legal level. HSBC is a "giant" in the financial industry, but it is like a boat in international politics, and its future is full of uncertainty. If it can't leave the China market, HSBC needs to seek a balance between China and the United States in the future, instead of just considering the unilateral hegemony and interests of the United States.
Third, there will be subtle changes in the situation of HSBC in China Mainland and Hongkong. The latest evidence released by Canadian courts reveals the fact that HSBC participated in "framing" Meng Wanzhou and cooperated with the United States to suppress Huawei. This quickly aroused anger against HSBC in China's domestic public opinion, and offensive remarks against HSBC will definitely increase in the future. In addition, HSBC's assistance to the United States as a "tainted witness" will affect its business reputation and market image. In the future, some enterprises and individual customers who have important relations with China may avoid HSBC when choosing a bank, and avoid becoming a "sacrifice" for HSBC to the United States. This will have a negative impact on HSBC's markets in the Mainland and Hong Kong.
Fourth, the China administration may not deliberately suppress HSBC. Although HSBC stabbed Huawei in the back, from a larger perspective, researchers from Anbang think tank estimate that the China government will not deliberately suppress HSBC. The reason is: (1) HSBC is very important to Hong Kong. In the future, Hong Kong needs to maintain its prosperity and status as an international financial center. HSBC, which was born in Hong Kong and has a great relationship with Hong Kong residents and enterprises, is an important symbol and an important commercial existence. (2) China's opening to the outside world requires foreign capital, not only the introduction of foreign capital, but also the continuous operation of foreign capital. HSBC is a foreign bank with the largest number of outlets in China, which is representative among foreign financial institutions. (3) China's "sanctions" against foreign banks need to be based on laws, and the current legislative status is hard to trace back to the past. China's Law on International Criminal Judicial Assistance was promulgated on 20 18, and the Law on Port Security was promulgated on June 30, 2020. These two laws may not trace back to HSBC's past behavior, but they will form legal constraints on HSBC's future behavior.
HSBC's involvement in the U.S. crackdown on Huawei will cause complex repercussions in China. Starting from the overall situation, the China government should not deliberately attack HSBC, and it may not go back to the past legally. However, the future development of HSBC in China market may be affected to some extent, and its future behavior will be bound by the laws of China. To put it bluntly, this is the only time to help "trap" China Company, and it won't happen again.