FirstFT: HSBC’s Chinese group sets up a Communist Party committee

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HSBC has become the first foreign lender to install a Chinese Communist Party committee at its investment banking branch 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% from 51% in April.

A CCP committee, which may consist of several branches, is required by Chinese corporate law but is not yet widely applied among foreign financial groups. It is usually made up of three or more employees who are also members of the Chinese Communist Party.

HSBC’s decision will put pressure on other foreign banks to do the same. Some have considered whether they are required to do so after taking full ownership of their brokerage and securities operations on the mainland over the past two years, several senior officials at those institutions said.

Seven global banks oversee investment banking operations in mainland China – HSBC, Goldman Sachs, JPMorgan, Credit Suisse, Morgan Stanley, UBS and Deutsche Bank – however, only HSBC has so far set up a CCP committee, according to several people familiar with the matter. . The other banks declined to comment.

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

Thanks for reading FirstFT Asia. Have a good week-end. – Emily

1. Biden says the Pentagon does not support Pelosi’s visit to Taiwan President Joe Biden has said the Pentagon does not support a planned visit to Taiwan by Nancy Pelosi, following reports that the Speaker of the House of Representatives is set to become the most senior US politician to visit the country in 25 years.

  • More information on US politics: Joe Biden contracted Covid-19 and started taking Pfizer’s antiviral pill to fight the disease, the White House has announced.

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

3. ECB hikes rates amid turmoil in Italy The European Central Bank has hiked interest rates by half a percentage point, pledging to prevent soaring borrowing costs from triggering a eurozone debt crisis amid political unrest in Italy and the resignation of Mario Draghi. The prime minister’s decision to resign triggered the dissolution of parliament and will push the country to snap elections in September.

4. Big Tech adheres to Indonesia’s strict content law Social media companies such as Meta, TikTok and Twitter have registered a license with the Indonesian Ministry of Communications under which they may have to censor content and hand over user data. Some registered only hours before a deadline of midnight Wednesday.

5. Millions of tons of grain will be released from Ukraine Russian and Ukrainian negotiators have struck a deal to export millions of tonnes of stranded grain, Turkey said, and will meet in Istanbul on Friday to pave the way for an end to Russia’s long-running blockade of Ukrainian Black Sea ports. for months.

Did you follow the news this week? Take our quiz.

The day ahead

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

International Court of Justice to rule on the Myanmar case The International Court of Justice must rule on if he is competent to hear a complaint filed by The Gambia against Myanmar for alleged genocide against its Muslim Rohingya minority. (The Diplomat)

Bolsonaro launches re-election campaign Brazilian President Jair Bolsonaro is expected to launch his presidential bid for the Liberal Party on Sunday, ahead of the October elections. However, former president Luiz Inácio Lula da Silva is favorite to win.

What else we read

China counts on its 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” – revealed a mountain of non-performing loans. In several countries in Asia, Africa and Latin America, the project risks metastasizing into a series of debt crises.

How is the jet stream related to heat waves around the world? Scientists are racing to figure out if the band of fast-moving air that controls mid-latitude weather is changing in a way that makes heat waves more frequent and persistent.

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

Mystery of surging Berkshire Hathaway ‘ghost’ stocks solved In a new research paper, professors from the University of California at Berkeley, Columbia University and Cornell University say they have discovered what they described as a “phantom and non-existent trade” on the most expensive stock in the United States.

Financial exclusion in the UK gypsy and traveler community Gypsies and Travelers in Britain are already marginalized, but face other problems when it comes to obtaining insurance and banking access. The FT takes a rare inside look at the travel community to see how they struggle to overcome financial exclusion.

Video: Fighting against financial exclusion in the gypsy and traveling community

Why Xi changed tactics in his crackdown on Didi China’s economic slowdown has made President Xi Jinping’s approach to the rideshare group harder to sustain, but his pivot on Didi does not represent a change of course from his broader shared prosperity agenda. , writes Tom Mitchell.

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

Chess

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

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