HSBC a pawn in political chess game

HSBC is in hot water - a plight the London-based bank could well do without. When People's Daily named and condemned HSBC in a highly critical commentary several days ago, the rhetoric was full of vengeful language, saying Beijing firmly held HSBC responsible for the difficult position facing...

Mary Ma

Tuesday, July 28, 2020

HSBC is in hot water - a plight the London-based bank could well do without.

When People's Daily named and condemned HSBC in a highly critical commentary several days ago, the rhetoric was full of vengeful language, saying Beijing firmly held HSBC responsible for the difficult position facing ex-Huawei "princess" Meng Wanzhou.

On the one hand, it was Beijing's response to British Prime Minister Boris Johnson's ban on Huawei, as well as his offer of residency and even citizenship to up to three million Hongkongers holding British National (Overseas) passports.

On the other hand, it's part of the ongoing battle to free Meng from Canadian custody.

Beijing has been doing everything possible to protect the strategically important Huawei, and Meng had been at the center of it for many years until her arrest.

Legal arguments are often dry to the layman, but they can be fascinating to follow if secrets are revealed.

Meng's defense team recently submitted further information to the British Columbia court, confirming for the first time that she had secretly met a top HSBC executive back in 2013.

Earlier, Reuters exclusively reported that the meeting was requested by Huawei.

However, according to the court filings provided by Meng's team, the meeting was actually requested by HSBC.

Obviously, the different claims will be contended by the two sides in upcoming extradition hearings.

Nonetheless, the court might not have to rule to ascertain which claim was factual since the hearings are about extradition, leaving the rest of the facts to be determined in future by a criminal court should an extradition be upheld.

According to the latest information, Meng - at HSBC's invitation - attended the meeting at a top-notch steak house at IFC Two in Central.

During that meeting she gave a PowerPoint presentation on Huawei's business - including dealings in relation to Iran.

Afterwards, HSBC requested an English edition of the PowerPoint file, which later formed part of the charges the US brought against Meng.

In hindsight, Meng no doubt regrets giving HSBC the file.

Also in hindsight, Beijing may conclude the "invitation" was just a trap. This perhaps explained the damning piece by People's Daily accusing HSBC of being an accomplice of the US.

HSBC pleaded innocence, denying it had framed Huawei as alleged. I doubt the denial will be of any help in resolving HSBC's plight since the Sino-US confrontation has escalated drastically beyond Huawei to a new level.

Meng's case has turned HSBC into a soft pawn on the geopolitical chessboard. For Beijing, the bank's dependence on the Greater China market provides Beijing with leverage to punish Britain for siding with the US.

The high profile way in which HSBC's Asian chief Peter Wong Tung-shun signed a petition in support of Beijing's national security law for Hong Kong also made the bank unpopular among Western politicians, although it is believed the US will exercise restraint in sanctioning it.

The Sino-US conflicts won't go away anytime soon - and HSBC will continue to be stuck between a rock and a hard place.