HSBC on Friday reportedly sought to squash rumors from Chinese news outlets that the London-based bank plans to pull out of China as part of a recently reinstated global restructuring that will see it shed 35,000 jobs, even as the lender has recently taken heat in the West for its support of Beijing’s new national security law curtailing civil liberties for Hong Kong residents.
In a Chinese-language post on its WeChat social media account, the bank, which brings in the lion’s share of its profit from China, disputed unidentified internet rumors that it called misleading and unfounded and reiterated its commitment to doing business in the nation.
“For over 150 years, we have been deeply rooted in China and have never stopped servicing the mainland,” multiple news outlets reported the bank as saying in the post. “Going forward, we will continue to invest in our China business, services, talents and technology. As always, we will continue contributing to the sustainable development of China’s economy."
“Since the reform and opening more than 40 years ago, HSBC has been a steadfast backer of and active participant in China’s economic and social development,” the bank said.
The post came after several Chinese news websites, including a Communist Party-affiliated tabloid, ran stories this week suggesting that HSBC could pull out of China as a result of the mass layoffs, according to the South China Morning Post.
An HSBC spokesperson declined to comment.
The headcount reduction, originally unveiled in February and recently reinstated after being halted due to the coronavirus pandemic, is part of a corporate restructuring that would see HSBC — originally founded in 1865 as the Hongkong and Shanghai Banking Corporation — redirect assets from Europe and the United States toward Asia and the Middle East to try to boost its falling profits. The bank has said the redundancies will likely be focused in its “underperforming” units in Europe and the United States.
Making talk of a departure from China even more baffling, HSBC has recently faced harsh criticism in both the U.S. and the U.K. for aligning itself with Beijing by supporting the controversial Hong Kong security law. HSBC initially stayed silent on the law for a time, but in early June top Asia executive Peter Wong signed a petition of support after Chinese media and politicians called out the bank.
U.S. and U.K. lawmakers have criticized HSBC for backing what they call a violation of Hong Kong’s autonomy. U.S. Secretary of State Mike Pompeo last week accused the bank of “corporate kowtow.” Aviva Investors, one of the bank’s top shareholders, has also said it was “uneasy” with HSBC’s support of the Chinese security law, CNBC reported on June 10.
But HSBC has stuck by its decision to offer public support for the law. Earlier this week, Bloomberg reported that Greg Guyett, HSBC’s co-head of global banking and markets, distributed an internal memo promising that “China and the West will continue to have deep economic and trade relationships — and Hong Kong will remain an important conduit given its robust markets and business framework.”
Guyett also reiterated support for the Chinese security law, Bloomberg said, and continued, “We respect and support laws and regulations that will enable Hong Kong to recover and rebuild the economy and, at the same time, maintain the principle of one country, two systems.”