In this era of rapid change, banks are not only the backbone of the financial system, but also a key force in the country's economic development. Recently, however, there has been a lot of attention on the Internet on a thought-provoking topic: the role of HSBC in China.
This bank, which once had high hopes, has been repeatedly accused of being a traitor at critical moments, sucking the blood of China for 150 years, and now it has finally ushered in its due retribution?
HSBC, the financial giant that plays a complex role in China's history, is a well-known but controversial name for many Chinese.
Founded in the mid-19th century, the story behind HSBC is closely linked to British colonial expansion. After the two Opium Wars, the British successfully opened the door to China and began their economic colonization of China. Unlike the Spanish or French colonial approaches, the British were more focused on economic control, and HSBC was a key part of this strategy.
Thomas Susherland, a famous British banker, saw the needs of the times and decided to set up this bank in Hong Kong, with the aim of helping the British to firmly control China economically. His decision was widely supported by British political and business circles. In 1865, HSBC was founded in Hong Kong, and soon after that, opened a branch in Shanghai, and began its financial activities in China.
The establishment of HSBC was closely related to the political and economic background of China at that time. Defeated in the two Opium Wars, the Qing needed to borrow heavily to pay the reparations to Britain and France. With China's local capital forces weak and unable to access the high-barrier banking sector, HSBC has taken advantage of the trend and rapidly expanded its business in China.
What's more remarkable is that HSBC did not choose to deepen its cultivation in the private market, but directly established a cooperative relationship with Qing **. From 1874 to 1890, it provided more than 28 million taels of loans to Qing **, helping Qing ** solve the problem of reparations. But this help is not gratuitous, and HSBC's demand for the use of key industries – customs, railways, salt taxes, etc. – as collateral undoubtedly puts China's economic lifeline in the hands of foreign banks.
During this period, HSBC's behavior can be described as typical of colonialism. Although it ostensibly provides financial assistance, it is in fact engaged in economic plunder. This kind of behavior is a profound betrayal for China, because HSBC is taking advantage of the Chinese market while harming China's fundamental interests.
With the rise of the Westernization Movement, a group of ambitious national capitalists emerged in China, who put forward the slogan of "industry to save the country" and tried to revitalize the country's economy by establishing factories and commercial entities. However, HSBC, as a representative of foreign capital, saw that the rise of Chinese national capital posed a threat to its economic interests and began to take measures to suppress these emerging national enterprises.
Especially in the late Qing Dynasty and early Republic of China, as the democratic revolution promoted by Sun Yat-sen and others gradually heated up, HSBC felt unprecedented pressure. Fearing that the victory of the democratic revolution would shake their economic position in China, they began to intervene in the political process. Not only did they try to thwart the progress of the revolution, but they also politically supported Yuan Shikai and others in order to maintain their interests in China.
In addition, in the early 20th century, after Britain signed an alliance with Japan, HSBC began to cooperate with the Japanese to provide financial services to the Japanese army invading China, and even assisted in the transfer of Japanese assets in China. These actions have caused great controversy and resentment in Chinese society.
In the 21st century, HSBC was involved in the "Meng Wanzhou incident". In 2018, Huawei's vice chairman, Meng Wanzhou, was arrested in Canada, and charges were subsequently filed by the U.S. Department of Justice. **HSBC's role in the case was that it submitted a large amount of Huawei's internal information to the U.S. Department of Justice, which led to legal problems for Huawei and Ms. Meng. The incident caused a huge storm in China, and HSBC's reputation was dealt a serious blow.
After the outbreak of the "Meng Wanzhou incident", HSBC suffered an economic blow unprecedented in its history. This incident is not only a huge loss to HSBC's reputation, but also a substantial impact on the business level.
After the news, HSBC's share price sharply** and the market lost confidence in it. This loss of trust has led to the evaporation of 650 billion in its market value in a short period of time, almost a third of its market capitalization. In the capital market, HSBC has turned from a high-performing stock to a risk stock, and investors have withdrawn.
To make matters worse, HSBC's business in China has also been hit hard. A number of Chinese companies, often powerful and high-quality customers, have announced the termination of their ties with HSBC, and their departure has not only directly affected HSBC's business volume, but may also strengthen the market position of its competitors.
Chinese officials have also paid close attention to the incident. On June 1, 2020, People** published an article severely critical of HSBC, signaling discontent at the official level and possible policy adjustments. Subsequently, HSBC lost its qualification to underwrite China's US dollar government bonds, and this important business was replaced by its rival Citibank, meaning that HSBC's position in China's financial markets was seriously affected.
In Europe and the United States, HSBC is also facing challenges. Traditionally, one of the core aspects of banking has been customer confidentiality. HSBC's actions in the "Meng Wanzhou incident" are considered to be a betrayal of customer trust, which has led many large European and American companies to choose to terminate their cooperative relationships with HSBC to avoid the risk of their own information being leaked.
Together, these factors have led to a sharp deterioration in HSBC's financial position. In 2019, its net profit increased from 137$2.7 billion plummeted to $60$5.9 billion, almost halved. In 2020, the situation is still not optimistic, and net profit will decline further. At the same time, HSBC's European operations also suffered huge losses, forcing it to sell off its retail banking business in several countries.
Faced with such a predicament, HSBC's top management has also been in turmoil. In August 2019, the Group Chief Executive Officer and Group General Manager of HSBC Holdings left the company to pursue other development opportunities. In terms of layoffs, HSBC had to take large-scale layoffs to reduce expenses, but this approach did not solve the problem fundamentally.
**From the Internet, if there is any infringement, contact to delete!