February 7, 2023

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HSBC has become the first foreign lender to install a Chinese Communist Party committee in its investment banking subsidiary in the country, a move that will put pressure on Western rivals operating in China to follow suit.

The lender’s Chinese investment bank, HSBC Qianhai Securities, recently established a CCP committee, according to two people familiar with the decision. The move came after HSBC increased its stake in the joint venture, which it launched in 2015, to 90 percent, from 51 percent in April.

A CCP committee, which may consist of multiple branches, is required by Chinese company law, but is not yet widely adopted by foreign financial groups. It is usually formed by three or more employees who are also members of the Chinese Communist Party.

HSBC’s move will pressure other foreign banks to do the same. Some have explored whether they are required to do so after taking full ownership of their mainland securities and brokerage businesses in the past two years, several senior people at those institutions said.

Seven global banks control investment banking operations in mainland China — HSBC, Goldman Sachs, JPMorgan, Credit Suisse, Morgan Stanley, UBS and Deutsche Bank — but so far only HSBC has established a CCP committee, according to multiple people familiar with the matter. . The other banks declined to comment.

US bank executives are particularly concerned about the prospects of potentially exposing strategic decisions and customer data to the CCP, several told the Financial Times.

Thanks for reading FirstFT Asia. Nice weekend. — Emily

1. Biden Says Pentagon Doesn’t Support Pelosi’s Visit to Taiwan President Joe Biden said the Pentagon did not support a planned visit to Taiwan by Nancy Pelosi, following reports that the Speaker of the House of Representatives would become the highest-ranking American politician to visit the country in 25 years.

2. India elects the first tribal group member as president India has elected a tribal woman as president, making Droupadi Murmu the first of that historically marginalized population and the second woman to serve as the country’s head of state. The Indian presidency is largely ceremonial but has a number of key powers, including the right to appoint the prime minister in the event of a hung parliament.

3. ECB raises interest rates amid tumult in Italy The European Central Bank has raised interest rates by half a percentage point, pledging to prevent rising borrowing costs from sparking a eurozone debt crisis amid political turmoil in Italy and the resignation of Mario Draghi. The prime minister’s decision to resign has led to the dissolution of parliament and will force the country into snap elections in September.

4. Big Tech Signs Indonesia Strict Content Law Social media companies, including Meta, TikTok and Twitter, have applied to the Indonesian Ministry of Communications for a license that may require them to censor content and hand over user data. Some didn’t register until hours before a deadline at midnight on Wednesday.

5. Millions of tons of grain are released from Ukraine Russian and Ukrainian negotiators have agreed to export millions of tons of stranded grain, Turkey has announced, and will meet in Istanbul on Friday to clear the way for an end to the months-long Russian blockade of Ukraine’s Black Sea ports.

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the next day

January 6 hearing The commission investigating last year’s attacks on the Capitol is set to hold the latest in a series of public hearings. The primetime session is expected to focus on the 187 minutes in which rioters entered the Capitol and before former President Donald Trump made a statement.

world court ruling on the Myanmar case The International Court of Justice will rule on whether it is authorized to hear a complaint filed by The Gambia against Myanmar for alleged genocide against the Rohingya Muslim minority. (The diplomat)

Bolsonaro launches reelection campaign Brazilian President Jair Bolsonaro will launch his presidential candidacy for the Liberal Party on Sunday ahead of the October elections. However, former president Luiz Inácio Lula da Silva prefers to win.

What else do we read

China anticipates first overseas debt crisis Our analysis of the financial health of the Belt and Road Initiative – once hailed by Chinese leader Xi Jinping as the ‘project of the century’ – has uncovered a mountain of non-performing loans. In several countries in Asia, Africa and Latin America, the project threatens to develop into a series of debt crises.

How is the jet stream connected to heat waves around the world? Scientists are rushing to understand whether the band of fast-moving air that controls weather in the mid-latitudes changes in such a way that heat waves become more frequent and persistent.

  • Go deeper: For more data on climate change, Sign Up to our Climate Graphic: Explained newsletter, delivered every Saturday.

Mystery of Berkshire Hathaway’s ‘phantom’ stock surge solved In a new research paper, professors from the University of California, Berkeley, Columbia University and Cornell University said they had discovered what they described as “phantom, nonexistent trading” in the most expensive stocks in the US.

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Financial exclusion in the British gypsy and traveler community Gypsies and travelers in Britain are already marginalised, but have even more problems when it comes to getting insurance and access to banks. The FT takes a rare look at the traveler community to see how it fights to overcome financial exclusion.

Video: Combating Financial Exclusion in the Gypsy and Traveler Community

Why Xi Tackled in His Crackdown on Didi The economic slowdown in China has made President Xi Jinping’s approach to the group announcing the rides more difficult to sustain, but his pivot at Didi means no change of course deviating from his larger common prosperity agenda, Tom Mitchell writes.

The science of criticism that really works Is it really possible to get better at giving and receiving constructive criticism? There are three stages we go through when we get criticized: “fuck you”, “I suck” and then “let’s make it better”. Esther Bintliff looks at how to get to the third stage faster?.

To play chess

World Chess Champion Magnus Carlsen has relinquished the crown. The 31-year-old Norwegian, world champion since 2013 and the world’s number one player since 2011, admitted he was “not motivated to play another game”, ending a decade-long reign at the top of the world. the game.

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