HSBC, ‘the world’s local bank’: Imperialism at work

“The banks got bailed out! We got sold out!”

Submitted by supporters of Fight Racism! Fight Imperialism!

Mark Pearson, Patrick Reay and Toby Hobbs were arrested for participating in protests at an HSBC branch in Newcastle, as part of ongoing resistance to cuts to education, other public services and jobs. The cuts to jobs and public services represent class war, brutally demonstrated by the recent statement of the coalition Chancellor, multi-millionaire George Osborne, that he would reduce the number of people who claim benefits as a ‘lifestyle choice’. He was not referring to the bankers.

HSBC is a fitting target for protests against the cuts. HSBC has dodged an estimated £2 billion of tax since 1993 using complicated off-shore schemes to transfer profits to shareholders without paying tax in the UK. It has done this with the complicity of successive British governments. Although HSBC was not bailed out directly during the global financial crisis, the bank depended on the cash injected into the financial system as a whole for its survival, and received more than $3.5 billion from the US government bailout of AIG via its subsidiary HSBC Bank USA. HSBC is a longstanding and major player in British finance capital. As such, it represents a major part of the ruling class interests which are being served by the government’s cuts.

The current economic crisis has its roots in the over accumulation of capital in the main imperialist countries and in the scramble for profitable investment opportunities globally. HSBC is one of the largest banking and financial services organisations in the world, with total assets of $2.418 trillion in June 2010. It has its headquarters in London and around 8,000 offices operating in 88 countries and territories across Europe, the Asia-Pacific region, North, Central and South America, the Middle East and Africa. Many of HSBC’s principal companies opened for business over 100 years ago. The founding company from which HSBC took its name, the Hong Kong and Shanghai Banking Corporation, was founded in 1865 to finance trade between China and Europe’s imperialist powers. By the 1880s, HSBC was acting as banker to the Hong Kong government and also participated in managing British imperialism’s government accounts in China, Japan, Malaya and Singapore. By the end of the century it was the foremost financial institution in Asia, leaching massive profits for Britain. In the early years of the twentieth century, HSBC widened the scope of its activities in the East. The First World War disrupted business but the 1920s saw a return to prosperity for the imperialists as new markets were opened up and new industries developed and trade in commodities such as rubber and tin soared.

Through its occupation of Malaya, in the mid 20th century Britain controlled 45% of the world’s natural rubber and 30% of global output of tin. These exports provided a crucial source of dollars for British imperialism as it rebuilt after the second world war. HSBC was an active partner in this imperialist parasitism, opening its first branch in Malaya on the island of Penang in 1884, with special powers to issue currency, and expanding its operations rapidly throughout the first half of the twentieth century. Between 1939 and 1949 the wages of the labourers who worked the plantations and mines fell by nearly 80%, while plantation owners announced record dividends. When the Malayan people resisted and demanded better wages the British Labour government banned the main pan-Malayan trade union federation and rushed military forces to the country to put down the resistance, including shooting unarmed demonstrators and interning activists in concentration camps. This is the price of HSBC’s wealth.

HSBC launched the world’s first Emerging Markets Index (EMI) in 2009, a tool that provides an overview of ‘emerging market economies’. ‘Emerging markets’ is a term which refers to new markets for imperialist expansion that have been forced open in oppressed countries, by war, unfair trade relations, loans from imperialist institutions such as the IMF and World Bank which cripple economies for outright plunder. The EMI highlights the need for capital to be constantly looking for new markets and targeting underdeveloped nations where higher profits can be made.

Take the example of Nigeria. Between 1958 and 2004, the Niger Delta region generated $360bn in oil wealth. None of this money has been seen by the people of the Niger Delta. Much of it is laundered through British banks, such as HSBC and Barclays. Meanwhile the people of the Niger Delta region live in poverty; 70% lack basic facilities such as running water, electricity, hospitals and medicines and proper housing. The vast majority of the 140 million Nigerians subsist on about 50p a day – £155 per year. Imperialist governments, banks and companies fuel conflict in Nigeria, import arms and foster racist ethnic divisions.

In this way, HSBC gets away with robbing the world, making super profits out of the exploitation, misery and starvation of billions of working class people across the globe, whose living standards are driven further and further down in order to increase profitability. In August 2010 the five biggest British banks – HSBC, Lloyds Banking Group, RBS, Barclays and Standard Chartered – reported combined half-year pre-tax profits of more than £15bn. In November HSBC announced that it intends to double the basic pay of hundreds of its top investment bankers, in order to evade new restrictions on levels of cash bonuses.

Chairman of the board, Stephen Green, joined HSBC in 1982 and is on a salary of £1,250,000. In 2008 he publicly refused a bonus, but it later emerged that in that same year he received a £4.9 million addition to his pension pot, with another £1.4 million added in 2009. In September 2010, it was announced that Green would stand down from his position at HSBC in order to accept an invitation to join the ConDem coalition government as the Minister of State for Trade and Investment. He will play a key role in considering the future of banking in Britain. Green was made a life peer on 16th November 2010 as Baron Green of Hurstpierpoint in West Sussex, and is expected to take up his government role in January 2011.

No matter which party we vote for in Britain, it has been made very clear that the interests of big business will always come first and campaign promises will be forgotten: the parliamentary system in this country is a corrupt sham and the working class will no longer put their faith in it. This is why people are seeing the urgent need to come out onto the streets to demonstrate against the cuts, that is why HSBC and other imperialist banks and companies have been targeted, and will continue to be targeted.

Justice for the HSBC 3!
They say cut back, we say fight back!
Whose police? Their police! Whose streets? Our Streets!
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One Response to HSBC, ‘the world’s local bank’: Imperialism at work

  1. Would leave them now but as so poverty stricken I can’t afford to pay off my overdraft to do so! jacx

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