HSBC installs Communist Party committee at China unit, FT says

HSBC has formed a Chinese Communist Party (CCP) committee at its investment banking venture in the country, the Financial Times (FT) reported, citing two people familiar with the move.  

The committee was installed at HSBC Qianhai Securities after the European lender increased its ownership in the venture to 90 per cent from 51 per cent in April, the newspaper reported. 

Having a committee of communist party members is required by Chinese law but hasn’t been “widely” enforced at foreign financial firms operating in the country, the FT said. The committees serve as unions and sometimes as a way to install party members in a company’s upper management.  

The move will pressure other foreign banks to follow as some have been examining whether they are required to do so after taking full ownership of their mainland brokerage operations over past 2 years, the FT said, citing senior people.

HSBC declined to comment on the CCP committee, the FT said. People close to the bank said the group wouldn’t have any management role such as would exist in a Chinese state-owned enterprise, the FT reported.

An HSBC representative was not able to immediately comment when reached by Bloomberg News. 

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HSBC has also established CCP committees in other operations in China, including at asset management joint venture with Shanxi Trust, the newspaper said. BLOOMBERG