Editorial: Stand with Hong Kong

With Hong Kong’s future becoming dimmer by the day, one of the world’s largest banks has rendered that future even darker.

On Wednesday, Peter Wong, Asia-Pacific chief executive for banking giant HSBC, signed a petition supporting China's recently-approved national security law. Slated to go into effect in September, the law bans secession, sedition and any perceived foreign interference of China's Communist government.

China’s move is the latest blow to an island blanketed by protests calling for the preservation of Hong Kong’s unique liberty that it has enjoyed for more than 150 years.

Joshua Wong, a leading pro-democracy activist in Hong Kong, blasted HSBC’s decision on Twitter, saying it showed “how China will use the national security law as new leverage for more political influence over foreign business community in this global city.”

Hong Kong has traditionally enjoyed liberty and autonomy since China formally ceded the island to the United Kingdom in 1842. As a British colony, it grew into a beacon of free economic vibrancy.

The U.K. transferred the colony to China in 1997, and China agreed to honor and maintain Hong Kong's economic and political systems for 50 years after the transfer. That governing principle has been known as "one country, two systems."

So much for principle.

China isn’t merely violating the “one country, two systems” agreement. It’s ripping it into confetti and throwing it into the air to celebrate sounding the death knell for freedom and prosperity in Hong Kong.

***So China has violated its agreement with Britain. It’s violated its unspoken guarantee with the U.S. that Hong Kong would remain free. And it’s violated much of the goodwill carefully accumulated with strong U.S. allies and Chinese trading partners on the Pacific Rim - Australia chief among them.

In agreeing with the national security law, HSBC scurries into lockstep with other Hong Kong business institutions that appear fully prepared to trade fundamental freedoms for new business headquarters located under China’s crushing thumb.

As a multinational investment bank, HSBC has profited richly from “one country, two systems.” The bank traces its roots to 1865, when Scotsman Thomas Sutherland started the bank to cash in on new trade into China, particularly the opium trade. Today the bank is based in London, but in 2019, 49% of HSBC's revenue and 90% of its profit came from Asia.

The bank's support of this cruelly oppressive security law clearly is in response to the public scolding it received from Hong Kong’s former chief executive Leung Chun-ying, who posted on Facebook recently that HSBC should be mindful of "which side of the bread is buttered."

"In Hong Kong, at least," Forbes magazine reported, "it seems it’s Beijing-side up."

HSBC is clearly not your friendly neighborhood banker.

In July 2012, a U.S. Senate committee revealed that HSBC had broken money-laundering rules. It had helped Iran and North Korea evade U.S. nuclear-weapons sanctions, and laundered money for Mexican drug cartels. The bank received a $1.9 billion fine.

To curry favor with the U.S. Department of Justice, HSBC agreed in 2016 to launch a probe into Chinese telecommunications giant Huawei Technologies and its links to a suspected front company in Iran.

That helped the U.S. bring charges against Huawei's chief financial officer. That also enraged Beijing.

HSBC was in sore need of a better relationship with China. Knowing that makes the motive behind HSBC’s security-law approval blindingly obvious.

HSBC maintains a substantial presence in both the U.S. and Britain - nations that joined the chorus of outrage over the national security law. They also arguably hold the greatest stake in preserving a free Hong Kong.

In trying to appease everyone, HSBC is instead satisfying no one.

The U.S. has to act to preserve a free Hong Kong before it’s truly too late. The motive is even spelled out in the Hong Kong Policy Act of 1992:

"The United States should play an active role, before, on, and after July 1, 1997, in maintaining Hong Kong’s confidence and prosperity, Hong Kong’s role as an international financial center, and the mutually beneficial ties between the people of the United States and the people of Hong Kong."

Isn’t it past time to live up to that? After decades of successful U.S. trade with Hong Kong, China’s impertinence demands powerful action.

Beijing must be held accountable for its oppression. The U.S., without ambiguity, must spell out for China’s leaders the economic, financial and legal consequences of tightening its stranglehold on Hong Kong.

Congress is already working on it. Sens. Patrick Toomey, R-Pa., and Chris Van Hollen, D-Md., are proposing legislation to impose sanctions on Chinese officials and entities that enforce the crushing national security law. Sanctions would extend to banks that do business with anyone appearing to violate the "Basic Law," which is the legal document guaranteeing Hong Kong autonomy until 2047.

All this action is churning as President Donald Trump wants to preserve his initially successful phase-one trade deal with China. But the president also said last month he was “very torn” about whether to end the deal.

A strong answer to China’s belligerence will have to come down to Trump playing a game at which he’s a proven expert - hardball.