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HSBC Holdings PLC has installed a Chinese Communist party committee within its investment bank, the Financial Times reported on Thursday.
The committee will be placed in HSBC's investment banking subsidiary in China, HSBC Qianhai Securities.
HSBC lifted its stake in the joint venture, which it launched in 2015, to 90% from 51% in April, the FT noted.
The FT reported a CCP committee, which can be made up of several branches, is required by Chinese companies law but not yet widely enforced among foreign finance firms. It is typically made up of three or more employees who are also members of the Chinese Communist party.
‘It is significant in the sense of where [HSBC] is allocating its future,’ a source close to the matter said. ‘It is increasing its ties with an autocracy that clearly has views on how far it wants to reach into private companies. It is another brick in that wall.’
Other foreign banks in the country could be pressured to follow suit.
https://www.ft.com/content/eac99fd9-0c30-4141-821a-45348f61c113
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