US-China rivalry hinders a struggling HSBC


We've seen fall out over the UK is World Way decision suspensions of extradition treaties on most recently. Hong Kong considering on election delay That could mean HSBC's business shift may prove untenable under its current structure being listed in the UK and Hong Kong while supporting China's national security law, expectations of more drastic action on earnings, they are increasing well for more on this. We're joined by Bloomberg Finance reporter Harry Wilson. Thank you so much for being with me, Harry. Look, first of all on H S B. C. It was unusual, wasn't it? That HSBC made the statement that it did about China's controversial A new law that effects Hong Kong. Why do you think they did that? I can only surmise they come on the enormous amount of pressure to say something on it. Normally, banks, particularly HSBC have like to remain entirely apolitical. Getting into politics just isn't in the DNA. And I think the fact that they felt they had to come out and say something publicly shows that probably not saying something will was seen as a school, too. So we certainly have picked up in the last couple of months that our thanks senior to perfectly are getting a little hum. I think a lot of cools a lot of Um ah, imploring from their Asian businesses to basically toe the line of it more when when it comes to Christo. Events in Hong Kong and China. Okay, so that on the security law on the flipside, of course, the pressure in response to that Was was also apply from the UK side. So it's kind of ratcheted up the political pressure you know, on in both parts of their business, surely Yes. So they are getting pressure from all sides. Not just something you came to. The U. S. Is also called him out over this and they're really in a very difficult position because effectively theory some game we'll have You say that since Beijing China onside Is seen in the West to UK us being, uh, essentially going against Western policy, so there isn't really a wind for them haters. In some positions, they can take the fetal sides happy so But trying to be trying to walk a line between them, which sees the increasingly difficult Do you think things matters are going to get worse? And how does it affect the business going forwards? It's a UK bank, but that makes most of its money in Asia. Well, exactly of you should go back with the ancient history of HSBC in the late eighties early nineties recognized this issue, which is why they part of reason why they decided first byway and size of Midland Bank and build up a business. Outside of Asia more than they had at the time, and that was, in part at least a recognition that the situation could become more difficult. Posi handover of Hong Kong in 1997 Now what we've seen since 1997 attempts become a global bank has hit some some brake blocks from headwinds off late, So now they find themselves in a situation where There probably is exposed to Asia optically Hong Kong as they have ever been on that places them in a very difficult position. Because see they want to continue doing business in Hong Kong that increasing against me that they got here to the lines of China, But of course that puts a man on a collision course with Earth. With the U K and the Y the West. So how do you think that this is going to be expressed then? Potentially in earnings? I don't think we're going to really see anything. Take Lee and the earnings on this Aziz yet we're really in the Very early stages off this spook growing political contest between between China and Hong Kong itself. These Already in a family, the procession and that that is really with us China trade tensions or the problems we've we've been talking about just now, that's more to do with Corona virus before about the political people. We saw lately in Hong Kong. I think they probably were looking more 5 10 years out. It could be the case that you start to see a kind of maybe death of 1000 cups and those who have so little losses here and there now see that that is very well aware of that on there going to be looking through everything they can to make sure that that happens. Things are they increasingly difficult environments in which to do business, particularly in a country like China. Where are you? Nate is very important that You are being It seemed to be supportive off Chinese

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