In retrospect, HSBC’s decision in 1993 to abandon Hong Kong for London’s Canary Wharf was one of modern history’s worst business moves. It seemed perfectly wise at the time, just four years ahead of Hong Kong’s return to China and amid the early stages of Europe’s common currency boom. When the 1997 Asia financial crash arrived, it probably left Chairman William Purves and his colleagues feeling pretty happy about their decision.
Just a dozen years later, being based in Europe seemed much less attractive. First there was Wall Street’s subprime debacle. That was followed, in short order, by the euro crisis, the Libor controversy, the chipping away of Swiss banking secrecy and a U.K tax clampdown that cost HSBC $1.1 billion in 2014. It should be no surprise that current HSBC Chairman Douglas Flint now thinks returning to Hong Kong “would be potentially interesting.” Indeed, the only real question is, what is Flint waiting for?
HSBC finds itself in an enviable negotiating position. Hong Kong leader Leung Chun-ying’s superiors in Beijing would relish having one of the world’s premier financial institutions choose greater China over the West. President Xi Jinping would herald the move as a vote of confidence in China’s economic stability and his party’s broader legitimacy. It also would send a message to Hong Kong’s pro-democracy street protesters that their public agitation can’t derail big business.
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