HSBC to invest further in mainland China amid fallout over Hong Kong

HSBC will make new investments in mainland China just weeks after the bank backed controversial new security laws in Hong Kong.

The UK-headquartered bank is under fire from some shareholders and British lawmakers for its support for the new National Security Law in Hong Kong, its largest market, which critics say undermines freedoms in the city.

HSBC will establish a financial technology company on the mainland, and its life insurance joint venture in China will hire new staff to provide non-branch based wealth management services to customers in Shanghai and Guangzhou, the Asia-focussed lender said in a statement.

Many international financial institutions see opportunities in providing services to upper middle class and rich individuals in China and Asia more broadly.

HSBC hopes to be the top wealth manager in Asia in the medium to long term, Greg Hingston, the bank’s regional head of wealth and personal banking previously told Reuters.

Yesterday Foreign Secretary Dominic Raab stuck the boot into the bank, telling HSBC that Hong Kong citizen rights should not be sacrificed for banker bonuses.

Raab told parliament yesterday: “On HSBC and banks, I’ve been very clear in relation with HSBC and ... all of the banks: the rights and the freedoms and our responsibilities in this country to the people of Hong Kong should not be sacrificed on the altar of bankers’ bonuses.”

The security laws in Hong Kong came into effect on Tuesday night - making activities deemed subversive or secessionist punishable by imprisonment. The law was introduced to target anti-government demonstrators.

Hong Kong police have already made arrests under the new law, including one person said to have displayed a sign with the Union flag which called for Hong Kong's independence.

The law also sees Chinese security agencies in Hong Kong for the first time and allows extradition to the mainland for trial in courts controlled by the Communist Party.

China's parliament adopted the law in response to protests last year.