In The News

Western Bank Creates ‘Communist Unit’ In Order To Operate In China

Employees of HSBC Qianhai Securities, a London-based HSBC subsidiary in China, have formed a Chinese Communist Party (CCP) cell, making HSBC the first foreign financial institution to have done so in an investment banking subsidiary in China, the Financial Times reported Thursday.

Chinese law requires that all private companies — including foreign ones — set up CCP cells, but this has not historically been enforced upon foreign investment banks, the FT reported. These cells advocate for party priorities during corporate planning and meet to study Communist theory, and their expansion has been a clear priority under Chinese President Xi Jinping, the Wall Street Journal reported.

The cell was established by employees themselves rather than management, are common in China, and will not have influence on business operations, HSBC told the FT. However, some are less convinced that such cells are benign.

Party cells at private companies “observe and quickly absorb data in the beginning. But later on they will start to influence how board decisions are made and give instruction in some cases to the management of the company,” Dennis Kwok, a senior fellow at Harvard’s Kennedy School of Government told the WSJ.

“These Communist Party committees are not just for show. They exist to influence, monitor, and ultimately control the company,” Florida Republican Sen. Marco Rubio said in a statement.

Other Western banks including Goldman Sachs, JPMorgan, Credit Suisse, Morgan Stanley, UBS and Deutsche Bank also have investment banking subsidiaries operating in China which have not yet created CCP cells, but HSBC’s move will likely increase pressure on them to do so, the FT reported.

“There was an internal email that said we might need to do something, but for the time being… it is not yet compulsory,” the Asia head of one of these international lenders told the FT on conditions of anonymity.

HSBC did not immediately respond to the Daily Caller News Foundation’s request for comment.

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org

Max Keating

Share
Published by
Max Keating
Tags: ChinaHSBC

Recent Posts

Gregg Jarrett Breaks Down Question That Could Determine If Biden Autopen Pardons Are ‘Null And Void’

Fox News legal analyst Gregg Jarrett told “Kudlow” guest host David Asman Monday the answer…

12 hours ago

US Will Reportedly Let Iran Enrich Uranium In Major Nuclear Deal Concession

The U.S. will reportedly allow Iran to enrich civilian-grade uranium in a proposed nuclear deal,…

12 hours ago

Tim Walz’ Teenage Son Enlightens Him On Why Young Men Gravitate Toward Trump

Minnesota Democratic Gov. Tim Walz turned to his high school aged son to figure out…

12 hours ago

Supreme Court Declines To Consider Blue State AR-15 Ban For Now

The Supreme Court declined Monday to consider a challenge to Maryland’s ban on AR–15 rifles.…

13 hours ago

Maxine Waters Punished For Accepting Illegal Donations

California Democratic Rep. Maxine Waters’ congressional campaign has been fined $68,000 for violating several federal…

13 hours ago