HSBC has become the first foreign bank with investment business in mainland China to set up a Chinese Communist Party (CCP) committee as part of its operations, according to a July 21 Financial Times report.
The article noted that the British multinational has not yet commented on the matter, but people with close ties to the bank stressed that HSBC would not have any Party committee members in a management role like other Chinese state-owned enterprises.
As the largest bank in Hong Kong, HSBC collects most of its profits from Hong Kong. Its business has been affected by escalating geopolitical tensions between China and the West.
There are seven foreign investment banks in China, including HSBC. The move by HSBC in having a CCP presence in its operations may force other foreign banks to follow suit.
Some banks have been examining whether they are required to do so after taking full ownership of their mainland securities and brokerage operations in the last two years, Financial Times said, citing several senior people at those institutions.
In China, the CCP seeks to control all aspects of people’s lives, including economic activities. All Chinese companies are required to have a Party committee.
Financial Times noted that a Party representative is usually installed within a company’s top ranks, sometimes in a director or management role.
