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During the height of the Hong Kong protests last year, Pastor Roy Chan led a mixed bag of middle-aged and elderly church volunteers who attended pro-democracy demonstrations wearing yellow vests with Chinese characters on the back. They said “Protect the children.” .
They formed human chains to try to prevent the police from reaching the protesters, mostly teenagers and university students, shouting: “Hit us, don’t hit the children.”
Peter Fong / TNS
Pastor Roy Chan outside the Good Neighbor North District Church in Hong Kong. At least three HSBC bank accounts related to his church that aided pro-democracy protesters have been frozen, says Chan.
At times, the authorities obeyed. Many of the volunteers, including an 83-year-old man known as Uncle Wong, were gassed and peppered.
Chan and his church say they are now paying a price for such activism.
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Last week, while in Britain, the 39-year-old pastor went online and discovered that the bank accounts belonging to him, his wife and the Good Neighbor North District Church had been frozen. The next day, he learned that the police raided the two church locations and arrested a staff member and a former director.
Chan and his wife are charged with fraud and money laundering for failing to report millions in church donations, charges he denies.
“We are a registered charity. We have done everything legally, ”said Chan, who lives indefinitely in an undisclosed location in Britain with his wife and three young daughters.
The frozen accounts at HSBC were discovered a day after Hong Kong’s new national security police department confirmed that it had ordered the suspension of bank accounts belonging to former pro-democracy lawmaker Ted Hui, his parents and his wife. Hui was accused of misusing crowd-funded donations and is now self-exiling in Britain. Denies the charges.
Actions targeting the finances of government opponents have sent a chill across the land, showing how easily personal assets and multinational banks could be swept away in China’s crackdown on dissent.
The Hong Kong government denied that the measures were politically motivated, but experts said the city’s position as Asia’s main banking center would be compromised if China’s national security law were seen as a stick for economic coercion. .
“The reason this wasn’t done before is because China didn’t have the legal instrument to force financial institutions in Hong Kong to do things like this,” said Victor Shih, China financial policy expert at the University of California. in San Diego.
“Now that they have it, they are starting to exercise it quite extensively, which can easily become even more extensive.”
Kin Cheung / AP
Prominent Hong Kong pro-democracy activist Wong and two other activists, Lam and Agnes Chow, were jailed after they pleaded guilty to charges related to a demonstration outside the police headquarters during anti-government protests last year.
Beijing’s grip tightens
The accounts freeze comes as Hong Kong’s autonomy from China under a “one country, two systems” framework has been constantly dismantled amid a purge of critics from the media, government and education system.
The Hong Kong legislature is now deprived of opposition members after pro-democracy lawmakers resigned en masse last month to protest the disqualification of four colleagues. Prominent pro-democracy activists Joshua Wong, Agnes Chow and Ivan Lam recently received jail terms ranging from seven months to one year in jail for their role in last year’s protests.
And last weekend, media mogul Jimmy Lai, a persistent irritant from Beijing, was brought in shackles to court where he was charged with collusion with foreign powers via Twitter.
Once regarded as a haven at China’s doorstep, Hong Kong is now more indebted than ever to the increasingly tight control of the Chinese Communist Party. That fundamentally changes the city’s relationship with foreign companies, ordinary Hong Kongers planning their future, and the untold number of mainland Chinese who stationed their wealth in the former British colony thinking it was isolated from authorities on the other side of the border.
“My friends in the UK have been telling everyone to move their money out of Hong Kong,” said Simon Lee, co-director of the Chinese enterprise and international business program at the Chinese University of Hong Kong. “In terms of asset security, Hong Kong is no different from China now.”
Still, Hong Kong plays a vital role as a conduit of capital to and from China. As long as the Chinese yuan is not freely exchanged abroad, China will need Hong Kong as a currency clearinghouse. The city also has one of the largest stock markets in the world.
Billy HC Kwok / Getty Images
Hong Kong’s chief executive has said she no longer has access to banking services and must hoard cash at home as the United States puts pressure on Chinese officials.
But geopolitical tensions are affecting the territory’s financial institutions. The United States has imposed sanctions on more than a dozen Chinese officials, including Hong Kong CEO Carrie Lam, for their role in attacking the autonomy of the Chinese territory. Lam said he no longer has access to banking services and must accumulate cash at home.
The United States can exert such pressure because the dollar is still the world’s reserve currency and no bank, not even state-owned Chinese, can afford the cut. The United States also has considerable influence over the network system required to transfer funds around the world, known as Swift.
Banks caught in the middle
Caught in the middle are the multinational banks, which are tied to the US-dominated financial system but cannot afford to anger an increasingly antagonistic Beijing due to the size of the Chinese market.
Few companies exemplify this enigma better than HSBC, the British banking giant that was founded in 1865 in Hong Kong by Scottish merchant Thomas Sutherland after the Second Opium War.
Wayne Drought / nzpa
Democracy supporters accused HSBC of giving in to Beijing’s will, as the British bank carried out a second politically sensitive suspension in a week.
Although the company is based in London, most of the bank’s business is in Hong Kong and mainland China.
The bank, which still operates its Hong Kong offices from its Norman Foster-designed tower overlooking Victoria Harbor, has come under fire in China for cooperating with US investigators in the indictment against Huawei’s CFO Meng Wanzhou. He was later ridiculed in Hong Kong by pro-Beijing figures for not supporting the national security law from the start.
When its CEO in Asia signed a petition in June to support the law, the bank became the target of protesters, who vandalized some HSBC branches and defaced the two lion statues guarding its headquarters.
Then came the revelations this month that some of the frozen accounts linked to Chan and Hui were at HSBC.
That sparked outrage among supporters of democracy, who accused the bank of yielding to Beijing’s will.
“This incident is serious in nature and affects the trust not only of my family’s assets, but of all HSBC clients in Hong Kong and the world,” Hui wrote in a Facebook post. “According to the National Security Law, how much [are] banks and the business sector willing to sacrifice for the service of the regime? “
HSBC said it could not comment on individual cases.
Lee from the Chinese University of Hong Kong said the bank had to comply with the terms of the national security law.
“The definition of illegal activities is much broader now,” Lee said. “If a person makes a donation to an organization’s bank account and that person is shown to be involved in illegal activities under the National Security Act, the bank in question will be liable.”
If a dissident with a frozen account challenged a bank like HSBC, it could set up a confrontation over whether Western or Chinese laws would prevail in dueling jurisdictions.
“It’s just a matter of time,” said Shih of UC San Diego. “If both parties decide to use financial sanctions as a tool to govern, there will inevitably be lawsuits. You will have a clash of legal dictates from different countries. “
‘I trusted them’
Chan said he was considering filing a case in a British court, although he was concerned about more immediate concerns, such as feeding his family, now that he had lost access to his bank.
Chan, a former social worker who found religious guidance for young triad gang members, said the bank’s action would have a chilling effect on Hong Kong’s churches, many of which are packed with donations in a city brimming with wealth.
Good Neighbor North District Church, which also ran homeless shelters, was targeted for distributing food and providing medical care in protests and offering shelter to youth who fled their homes after confronting their parents over political issues, he said. Chan.
He is not sure if he will ever be able to return to Hong Kong. Uncle Wong urges Chan to stay in Britain. But Chan worries for his mother’s safety due to her legal problems. (He was vague about how he had the good fortune to plan a sabbatical in Europe shortly before the police raid.)
Chan hopes HSBC will eventually release its funds, but has no regrets about banking with the firm, which has more than 5 million clients in a city of 7.5 million.
“I’m from Hong Kong, of course I use HSBC,” he said. “There are not many other options. I trusted them, but they are being political and trying to work with the system. It’s disappointing “.
