HONG KONG (Reuters Breakingviews) - HSBC is catering to China’s soft power push, creating a job title sure to charm Beijing: Head of Belt and Road Initiative. The Asia-focused lender has staffed the role with senior banker Mukhtar Hussain, currently chief of HSBC Malaysia. Putting a heavy hitter in charge of coordinating efforts to tap the $1 trillion overseas infrastructure programme makes sense; rivals have employees playing similar roles without so exalted a title. Don’t be surprised to see other global banks copy HSBC.
Wall Street is adept at designing job titles, products or even whole trading desks to capture the financial fad of the moment. Think emerging markets two decades ago or sovereign wealth fund coverage more recently. HSBC has gone further than most in its efforts to signal public support for the Chinese policy initiative of the moment, with hopes for doing more business in the People’s Republic.
In 2014 the bank now led by John Flint appointed a Global Head of Renminbi Business Development as China lobbied the International Monetary Fund to include the yuan in the reserve currency basket. In 2013 it joined the rush to publicize operations in the newly minted Shanghai Free Trade Zone, an overhyped but ultimately disappointing initiative. Such new business cards are low-cost marketing. In HSBC’s case they may have helped the bank win permits to sell offshore yuan-related services, and to launch China’s first foreign majority-owned securities joint venture in 2017.
However, the hype surrounding President Xi Jinping’s signature initiative to expand Chinese influence around the globe has been unprecedentedly intense, even by Chinese propaganda standards. State media and officials have spun it as a solution to nearly every planetary issue, including the Israel-Palestine conflict.
Good relations have not spared HSBC from the downside when Beijing has changed its policy mind – the currency internationalization push, for example, stalled when China put up capital controls. The bank’s mainland operations still struggle against domestic rivals.
But Belt and Road could be a genuine opportunity, as it proposes to drive Chinese capital into some of the riskiest – but potentially higher return - corners of Asia. Hussain’s job might well involve keeping the bank off certain segments of the Road, while getting onto others. What’s sure is that rivals will be envious of his new business card.
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