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Standard Chartered & HSBC Openly Support Hong Kong’s New Security Law

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HSBC and Standard Chartered banks have backed the new security legislation in Hong Kong imposed by Beijing. The contentious law has triggered protests in the semi-autonomous city and has received a global backlash from several nations including the US. 

HSBC’s Asia Pacific chief executive Peter Wong signed a petition backing the law which has been widely criticised. HSBC “respects and supports all laws that stabilise Hong Kong’s social order,” it said in a post on social media in China.

Standard Chartered said that the law can “help maintain the long term economic and social stability of Hong Kong”. Both the banks are headquartered in Britain but have a significant market in Asia.

The support of these banks has drawn major criticism. Jacob Rees-Mogg, a British politician and the leader of the House of Commons, said London-based HSBC may be more closely “aligned with the Chinese government than Her Majesty’s government.”

Meanwhile, Andrew Adonis, a Labor member of the House of Lords and former Transport Secretary said that “HSBC should stand up for human rights in the city. However, the idea that financial institutions ought to operate as political activists when they are interest-driven organizations, is inherently unrealistic”.

What is the new security law?

The legislation is set to outlaw the acts of secession, subversion and terrorism and provides for a jail term of 3 years. The new law has seen a global condemnation. Legislators and politicians from as many as 23 countries have issued a joint statement criticising the new Security law imposed on Hong Kong.

Basic Law is Hong Kong’s mini-constitution which protects its rights like the freedom of speech and the freedom of assembly which don’t exist in mainland China. It also sets out a structure of governance in the city. The new law is seen as a threat to such freedoms protected by the mini-constitution.

“Does HSBC feel compelled to weigh in on other laws in other countries? We have watched over the past week China clearly assert pressure on businesses and other actors to show their support for the law to create the illusion of support,” said Sophie Richardson, China director for U.S.-based Human Rights Watch.

Reasons for support by the Banks

According to Tom Fowdy, a British political and international relations analyst and a graduate of Durham and Oxford University, the belief that major financial institutions would be predisposed to opposing Hong Kong’s national security law was ideological and based on an obvious misunderstanding as to how banks operate.

He explained that HSBC has lent its support for the new security law for various reasons. “The West seems to think that the pre-law status quo in the city is more attractive for financial institutions and that the law itself is the problem.

But evidence contradicts this: the escalating violence and constant disruption posed by protests as well as the continuing destruction of local infrastructure was actually a massive liability for businesses and pushing huge capital flights out of the city,” he added.

He further emphasised that HSBC and Standard Chartered support the law because the law is intended to solve the problem of instability in the city which it is facing right now. “Banks operate on a premise of stability, not activism. They are going to support legislation which ensures the restoring of public order,” he wrote. He went on to say that Trump’s threat to withdraw trading privileges from Hong Kong was not strong enough to “shake the markets”.

“Whilst the U.S. may withdraw trading privileges, this does not change the reality that Hong Kong’s setup remains of high quality and appeal for financial institutions,” he observed.

He argued that Beijing isn’t trying to break the “one country, two systems” as perceived by the west. “Beijing recognizes Hong Kong had a national security problem in the fields of sovereignty which needed to be addressed; however, this has no direct or indirect implications for the city’s own economic model which is of benefit for the whole country,” he added.

He concluded saying that HSBC and Standard Chartered have made an assessment that the national security laws proposed for Hong Kong run in accordance with their respective interests as financial institutions.

“The idea by some politicians that banks should be political activists and support unrest and chaos in the environment they exist in shows a minimal understanding of how these businesses operate,” he wrote.

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Americas

China Imposes Sanctions On US Defence Giant Behind F-16s, F-22 Raptors

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China has threatened to impose sanctions on US defence giant Lockheed Martin – the makers of Stealth F-22 Raptors, in response to US approving of a possible deal for Taiwan to buy parts to refurbish defensive missiles built by the company.

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Foreign Ministry spokesman Zhao Lijian made announced at a briefing in Beijing on Tuesday, adding that the US should cut defence ties with Taiwan “so that it doesn’t do further harm to bilateral relations and damage peace and stability in the Taiwan Strait.”

“China firmly opposes U.S. arms sales to Taiwan,” Zhao said, adding: “China decides to take measures to protect national interests. We will impose sanctions on the main contractor of this arms sale Lockheed Martin.”

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The US State Department last week approved a possible $620 million foreign military deal for Taiwan to buy parts of Patriot Advanced Capability-3 (PAC-3) missiles so that they can last 30 years.

Beijing’s actions come amid growing tensions between the US and China tensions over various issues including trade war, South China Sea dispute, COVID-19 pandemic, new security law in Hong Kong, 5G network and hostilities against key US allies including India and Australia.

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Despite it being a strategic American ally, the US has no official embassy in Taiwan nor does Australia, Canada, the UK or Germany. China calls Taiwan a ‘renegade province’ and has vowed it to merge it with mainland China, at all costs.

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Asia Pacific

India-China Economic Romance Cannot End With A Mere Border Clash – Chinese Experts

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India and China have been at each other’s throat for more than a month now. Aside from the military confrontation in Ladakh, India has also moved to disengage from China economically.

While the move has got the support from the majority of Indians, Cui Hui’ao of the China Global Television Network (CGTN) writes that disengaging from China might not be a choice for India and that economic de-coupling is driven politically by Narendra Modi.

As reported by Eurasian Times consistently during last month, the feud between India and China has been a rollercoaster ride. From military buildup, deadly clashes to de-escalation and eventual withdrawal, the clash of the two Asiatic giants has seen it all.

Cui writes that apart from the military confrontation, India has retaliated in the economic sphere, referring to the decision by the Indian government to ban 59 Chinese application including TikTok, WeChat and ShareIt and the call to boycott Chinese products.

The journalist at CGTN writes that decoupling from China may be easier said than done for India. He says that India is not a manufacturing powerhouse, so in terms of bilateral trade, it actually buys much more from China than the other way around.

Cui analyses trade data to support the fact that New Delhi will find it difficult to reduce its dependence on Chinese imports. Between April 2019 and March 2020, India imported over 65 billion U.S. dollars’ worth of goods from China.

Cui is of the opinion that the coronavirus pandemic has hit the Indian economy hard and in fact, the disengagement is driven by politics rather than economics. He finds it difficult to accept that India’s disengagement from China would take place at a time when the Indian economy is projected to contract by 4.5% according to the International Monetary Fund (IMF).

Economic Disengagement Driven Politically 

Speaking to Cui, Cheng Xizhong, a visiting professor from Southwest University of Political Science and Law, says that the decision to de-couple from China economically is because of the domestic pressure on Prime Minister (PM) Narendra Modi.

‘’Since his second term began yet Indian economy is a mess. He has to find a way to shift the public attention elsewhere,” he said.

The author agrees with the point made by Cheng Xizhong and writes that pressure on the Indian PM Modi comes from multiple fronts, including his own supporters, businesses, and farmers union. But this time, the nationalistic voice is even louder.

Other experts interviewed by Chui agree that New Delhi would benefit more if it partnered with Beijing. Professor Cheng, a former Chinese military diplomat in South Asia, said that since India started its opening-up in the 1990s, its economic growth has been crippled by lack of high-quality infrastructure and it would wiser if India and China work together.

Similar views are shared by Indian economist Biswajit Dhar, who says that India’s decision to start producing domestically has to be strategic and it cannot take the decision to produce everything.”

While India and China disengage at the battlefront in Ladakh, the Indian government is looking for solutions to reduce its dependency on Chinese imports. PM Modi has encouraged all Indians to become self-reliant (Aatmanirbhar) by producing and purchasing indigenous goods and boost the Indian economy.

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Americas

US-China ties to worsen as Trump set to block all Chinese claims in South China Sea

Ties between US and China could dramatically worsen over the South China Sea after Secretary of State Mike Pompeo said Washington now regards virtually all Chinese maritime claims outside its internationally recognised waters to be illegitimate. 

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Ties between the US and China are set to further deteriorate over the South China Sea as the Trump administration is set to outrightly reject almost all of Chinese maritime claims in the contentious waterbody.

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The Trump government presented the decision as an endeavour to restrain China’s increasing belligerence in the region with a commitment to recognising international law. This move in the South China Sea will further enrage the Chinese, who are already countering against various US sanctions and other penalties.

Previously, US policy had been to insist that maritime spats between China and its smaller neighbours be settled peacefully through UN-backed arbitration.

But in a statement released on Monday, Secretary of State Mike Pompeo said Washington now regards virtually all Chinese maritime claims outside its internationally recognised waters to be illegitimate.

“The world will not allow Beijing to treat the South China Sea as its maritime empire,” Pompeo said. “America stands with our Southeast Asian allies and partners in protecting their sovereign rights to offshore resources, consistent with their rights and obligations under international law. We stand with the international community in defence of freedom of the seas and respect for sovereignty and reject any push to impose ‘might makes right’ in the South China Sea or the wider region.”

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Although the US will continue to remain impartial in territorial conflicts, the announcement means Washington is now directly supporting Brunei, Indonesia, Malaysia, the Philippines and Vietnam, all of which oppose Chinese declarations of sovereignty over maritime areas surrounding disputed islands, reefs and shoals.

“There are clear cases where [China] is claiming sovereignty over areas that no country can lawfully claim,” the State Department said in a fact sheet that accompanied the statement.

The announcement was released a day after the fourth anniversary of a binding decision by an arbitration panel in favour of the Philippines that discarded Chinese maritime claims around the Spratly Islands and neighbouring reefs and shoals.

China has declined to recognise that ruling, rejected it as a “sham” and withdrew from the arbitration proceedings. It has continued to oppose the decision with aggressive actions that have brought it into territorial disputes with Vietnam, the Philippines and Malaysia in recent years.

However, as a result, the administration said China has no valid maritime claims to the fish- and potentially energy-rich Scarborough Reef, Mischief Reef or Second Thomas Shoal. The US has repeatedly said areas regarded to be part of the Philippines are covered by a US-Philippines mutual defence treaty in the event of an attack on them.

In addition to reemphasising support for that decision, Pompeo said China cannot legitimately claim the James Shoal near Malaysia, waters surrounding the Vanguard Bank off Vietnam, the Luconia Shoals near Brunei and Natuna Besar off Indonesia. As such, Washington said it would regard any Chinese intimidation of fishing vessels or oil exploration in those areas as unlawful.

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