Opinion | Astute adviser points bank in right direction
By Grenville Cross
Sir Sherard Cowper-Coles is a remarkable man. After a glittering diplomatic career, in which he served as British ambassador to Afghanistan, Israel, and Saudi Arabia, he became senior adviser to the group chairman of HSBC. He is now the bank's head of public affairs, with responsibility for its relations with governments around the world. He also chairs the China-Britain Business Council, the UK's national business network that promotes trade and investment with China.
As a former speech writer for Margaret Thatcher, Cowper-Coles has never been afraid to speak his mind. In 2008, for example, it was discovered, when a diplomatic cable was leaked, that he was critical of US policy in Afghanistan. He said that the UK should tell the US, "We want to be part of a winning strategy, not a losing one." If his advice had been heeded, the shambolic events of 2021, when the US and its allies abandoned Afghanistan in chaotic circumstances, might have been avoided.
Although an Arabist by training, Cowper-Coles has always been fascinated by China. While a schoolboy, he wrote to the Chinese embassy in London and was sent a copy of Mao Zedong Thought, which he still retains. When he finally visited Shanghai in 1985, he says he "absolutely loved seeing this great country".
As head of the Foreign Office's Hong Kong desk from 1994 to 1997, he was closely involved in the city's handover arrangements. As such, he had to deal with the last governor, Chris Patten, which could not have been a pleasant experience, although he had his measure.
In 2021, for example, when interviewed by Quartz's Annabelle Timsit, Cowper-Coles recalled how, at a meeting on Jan 8, 1995, Patten, "to my horror", said he had decided to break off negotiations with the Chinese over the Hong Kong Court of Final Appeal (the successor to the Judicial Committee of the Privy Council as Hong Kong's top court), and to establish it "without Chinese agreement". He was appalled, as he believed that China, which had been "very upset by the way we'd gone unilateral over the legislature, would be even more upset if we'd gone unilateral over the judiciary". As Patten always thought he knew better than anybody else and resented contrary opinions, he must have been incensed.
Although Cowper-Coles faced "great pressure" to "change my view", he refused to budge, as it "wasn't the right thing". In the event, Patten himself backed down, and "we did a deal on the Court of Final Appeal, which exists to today". Even then, he presciently saw Patten "and those around him becoming leaders of the opposition to China and to Chinese rule".
After leaving Hong Kong, Patten used his seat in the House of Lords (the second chamber in the British Parliament), to malign Beijing, and he made common cause with fellow ideologues. In 2020, for example, he became a patron of Hong Kong Watch, the UK-based anti-China propaganda outfit operated by the serial fantasist, Benedict Rogers, and he now uses its platform to spread his bile.
In May, when interviewed by CGTN, Cowper-Coles said Patten had known "nothing" about China, and that the Western politicians who were trying to "demonize" China were "naive". He added that "some of the nonsense we hear talked about in the US Congress, in the US media, and in parts of the Parliament in London about China these days just shows how ignorant people are and how prejudiced", and they needed to "come to China and see for themselves the realities".
Since he joined HSBC Egypt in 2014, as a non-executive director, Cowper-Coles, as a realist with a sound grasp of history, has more than proved his worth. The bank, which has recently had to make some difficult decisions, must have found his advice invaluable.
Once, for example, the National Security Law for Hong Kong was enacted in 2020, HSBC announced it "respects and supports all laws that stabilize Hong Kong's social order". Although, after the black violence of 2019-20, this was the obvious stance to adopt, those in the UK who supported the attempts to wreck Hong Kong and weaken China were furious, and they have been gunning for HSBC ever since.
They have, for example, made use of the UK's All-Party Parliamentary Group on Hong Kong (APPG), which brings together US stooges and British bigots, and was launched on Nov 6, 2019, to harass the bank. The APPG, despite its grand name, is a front organization financed through a consultancy by Stand with Hong Kong (SWHK), the subversive, anti-China grouping. It conducts bogus investigations and publishes fallacious reports about the police force and others, which is unsurprising. In 2021, the High Court was told that its backer, SWHK, has close ties with the media magnate, Jimmy Lai Chee-ying, who is accused of endangering national security, and of its attempts to harm Hong Kong's interests in foreign parts.
After SWHK had raised HK$37.6 million ($4.79 million) through crowdfunding in 2019-20, the money, the court was informed, was used for propaganda purposes, retaining lobbying firms, organizing demonstrations, and paying for sympathetic foreign politicians to visit Hong Kong. It also sought to drum up hostility to China in the US and elsewhere, and advocated punitive measures against Hong Kong and its officials.
Despite this, the APPG happily pockets the SWHK's cash. On Jan 11, 2023, it was discovered that SWHK, recognizing the propaganda value of the APPG, had invested 99,001 pounds ($125,223) in it (almost triple its initial investment of 34,501 pounds in 2019). Although this may have surprised some people, it is explicable on the basis that the APPG has been infiltrated by Hong Kong Watch, a key supporter of SWHK. Whereas its chair is Alistair Carmichael, a Hong Kong Watch patron, its vice-chair is another patron, Lord (David) Alton, whose visit to Hong Kong in 2019 (as an observer at the district council elections) was funded by SWHK.
Given the APPG's ties to both SWHK and Hong Kong Watch, nobody should have been surprised when, on Feb 8, 2023, it accused HSBC of "being complicit in suppressing the rights of Hongkongers". It claimed that HSBC had acted "unjustly" by not releasing the MPF savings of Hong Kong people who had moved to the UK. Carmichael even accused the bank of "doing the dirty work of the Chinese Communist Party", which is exactly what SWHK, as the APPG's financier, wanted him to say.
To its credit, HSBC did not take this lying down. In a response, likely formulated by Cowper-Coles, it announced its "enduring commitment to Hong Kong, its people and communities: it is where we were founded nearly 160 years ago". This apart, HSBC, like any other bank, has to have regard to the realities of the situation, including the legal position. As Cowper-Coles would have known, the entry documents the British government provided to Hong Kong immigrants are insufficient to unlock their funds, given that British National (Overseas) visas, issued in contravention of the Sino-British Joint Declaration of 1984, are invalid for identification purposes.
As Britain's then-attorney general, Lord (Peter) Goldsmith, explained in his Review of Citizenship in 2008, the granting of full British citizenship to BN(O) passport holders "would be a breach of the commitments made between China and the UK in the 1984 Joint Declaration on the future of Hong Kong." In light of this, therefore, HSBC explained that "like all banks, we have to obey the law, and the instructions of the regulators, in every territory in which we operate". The legal niceties, however, were wholly lost on the APPG, which only wanted to smear HSBC, and it is once again on the warpath.
In June, when Cowper-Coles spoke at a closed-door meeting in London, held under Chatham House Rules (by which attendees are free to use information gained from discussions, but cannot reveal who made any comments), his speech was leaked. He said the UK was "weak", and that, instead of bowing to US demands over China, it should look after its own interests. According to Bloomberg, he then gave the example of the UK caving in to US bullying when Boris Johnson's government, in 2020, banned China's Huawei telecoms company from participating in Britain's high-speed 5G network.
This, of course, was spot on. In January 2020, Johnson decided, to US fury, that it was in the UK's national interest for Huawei to be granted a 35 percent stake in its 5G network. Once, however, the US applied the thumbscrews, Johnson performed a volte-face, in July 2020, and agreed to phase out Huawei's involvement altogether by 2027. It was a craven surrender, and showed that Washington's wishes trump British interests every day of the week.
Once, however, Cowper-Coles' comments were reported, HSBC's antagonists pounced. Sir Iain Duncan Smith, the parliamentarian sanctioned by China in 2021 and co-chair of the sinister Inter-Parliamentary Alliance on China (created by Hong Kong Watch in 2020), called him "the worst sort of apologist". The APPG also weighed in, with its vice-chair, David Alton (who was also sanctioned in 2021), claiming that "This incident raises further concerns over HSBC's priorities and its cosy relationship with the brutal CCP regime."
Given the furore surrounding his comments, HSBC sought to distance itself, saying Cowper-Coles had shared his "personal views" at a private round-table discussion. He himself, undoubtedly under pressure, felt obliged to issue an apology (of sorts) for "any offense caused". He said "my personal views do not reflect the views of HSBC or the China-British Business Council". He had, he explained, been "speaking at a private event under Chatham House rules".
Whereas HSBC, Europe's largest bank, is headquartered in the UK, it is China-focused and has a significant presence in Hong Kong, the Chinese mainland and the US. Over 80 percent of the bank's profits are generated from outside the UK, with more than half coming from Hong Kong and the Chinese mainland. This means it has heavy responsibilities in different places, and has to tread with some care.
There was, however, absolutely no need for Cowper-Coles to have apologized. Although HSBC has a global presence, it does not have to be overly timid. Whereas Sinophobes like Carmichael, Duncan Smith and Alton are only interested in harming the bank as a means of diminishing Hong Kong, they deserve to be treated with contempt, and HSBC must never shy away from standing up not only for itself but also its advisors.
Cowper-Coles has always spoken truth to power, and HSBC can count itself fortunate to have him on board. He is undoubtedly providing it with astute advice on geopolitical issues, and his insights should be cherished. He has predicted that China will become the world's largest economy, and he wants what is best for HSBC. Tremendous opportunities are opening up in the Chinese market, and the bank must not miss out, as some British businesses are at risk of doing. In its own best interests, HSBC should stand four-square with an adviser whose understanding of global realities is second to none.
The author is a senior counsel and law professor, and was previously the director of public prosecutions of the Hong Kong SAR.
The article was first published in China Daily.