HSBC: The Shanghai Connection - by Kit Villiers

As promised a couple of weeks back, here is a little background on how 'Shanghai' got into the title of what is now Britain's biggest bank.

You'll recall that the full name of HSBC is the Hong Kong and Shanghai Banking Corporation. The Hong Kong bit is clear enough: Hong Kong was a British colony from 1841 to 1997, and its main bank, almost a central bank, was (and still is) the Hong Kong Bank, or simply 'The Bank' for those that live there. As Jeremy Paxman pointed out in his 'Empire' series, the Bank's history has not always been totally untainted, the colony's early days being mixed up with the Opium Wars and other dark deals in which the Bank was doubtless inevitably intertwined....

But Shanghai? China was never anybody's colony: but for a large part of the 19th century it got pushed around by the European powers and might as well have been. In particular the Europeans forced concessions on China, the most obvious being the occupation of large parts of two of its main trading cities of Canton (near Hong Kong) and Shanghai, China's largest city. Even today one can see remnants of the old 'French concession', while the waterfront still has the old warehouses and offices of what were chiefly British interests.

In Hong Kong the Bank has rehoused itself in a modern skyscraper, but in Shanghai the buildings on the waterfront, the 'Bund', are in a kind of time warp; when I visited a couple of years back, I was told that the old (joint, with Hong Kong) HSBC head office was an exact replica of the building in Hong Kong. I did eventually find it, but I think it must be several generations older than its counterpart as I didn't recognise it at first at all. It looked pretty forlorn, and in fact the whole of the Bund is now overshadowed by the ultra modern developments in Pudong, on the other side of the river. Perhaps the Chinese want to show how much better they do things than the old European traders did in olden (i.e. pre-Communist) times.

I could well imagine that pre-1949 the Shanghai branch must have been as important as the Hong Kong one, but of course business nose-dived when the Mao regime took power and capitalism was discredited. But the powers that be in the Bank (mostly Scots, I believe) have always hankered after old glories, and hoped that Shanghai would recover its old profitable ways. They decided to try to stick it out, and keep Shanghai open until better times came round again. A skeleton staff was kept on, including one or two expat British officers.

Although quiet, things weren't too bad until the Cultural Revolution. Most foreigners fled China when that began, but the Bank was forced to keep at least one expat there or face being closed down completely. During the height of the Cultural Revolution this man was a friend of mine, one Tim Cotton. I asked him what life was like in those dark days. "Pretty grim", he said. "Mostly it was plain boring. There was no business, your Chinese friends were always in danger of being denounced and food was scarce. It was a strange feeling, being in one of the world's great cities, but being almost the only non-Chinese, and being surrounded (if you went out) by millions of glassy-eyed screaming locals wearing Chairman Mao suits and just staring at you as if you'd come from Mars". Luckily after a bit he discovered that Standard Chartered Bank were in the same position, and he spent the evenings with his opposite number: deadly rivals in Hong Kong, but thrown together by adversity in China. Whether they could get hold of the excellent Tsing Tao beer in those days or just had to content themselves with playing chess I'm not sure.

And how about today? Shanghai is of course thriving, and no doubt HSBC with it. But HSBC is just one of many international banks there, and it's only in Hong Kong and in the UK where it's the biggest kid on the block.

HSBC and the Hong Kong Demonstrations: The Perspective of a Former Resident - by Kit Villiers

I used to live in Hong Kong; my final years there coincided with the last Governor, Chris Patten, now the Chancellor of Oxford University, somewhat desperately attempting to introduce a bit of democracy to this British colony before the hand-over to China in 1997.

So naturally I've been following the recent demonstrations in Hong Kong with great interest. I'm not going to comment on the larger political issues, but one thing I've noticed is that whenever the press report on something that one knows a little about, they often get it wrong, at least, irritatingly, on details. The worst example I've heard in the Hong Kong saga so far was one reporter, who sounded Chinese but perhaps wasn't, who said: "and now the demonstrations are spreading to the island of Kowloon!"

Well, Kowloon isn't an island; it's a densely populated peninsula on the mainland. I must admit though, that for your average outsider, the term "Hong Kong" is a bit confusing: "Hong Kong" is the name of the whole territory (former colony), i.e. Kowloon, the New Territories and various islands. But one of these islands, the main one, where most demonstrations have been taking place, is also called Hong Kong. This island contains both the main business area ('Central') and the government offices.

Exactly where on the 'Island' the demonstrators were or are has also been confusingly reported. The reporters often refer to the 'Central Business District' and say the aim is to disrupt HK as a financial centre, but at other times the emphasis seems to be on disrupting the government itself, and getting the Chief Executive to resign (the two areas are different).

To sort out this this conundrum (and to check whether the bank was still operational and my measly savings still in place) I called my friend in HSBC. "Oh, we've hardly been affected - the demonstrators haven't really bothered us at all, and we've all been at our desks as usual all along".

I should explain that HSBC is of course the Hong Kong and Shanghai Banking Corporation, and while (after taking over the Midland Bank) its Head Office might technically now be in London, the bank's major operations and profits remain in the Far East. It was to the Hong Kong head office in Central that my call was directed.

I must say I was a bit surprised - as well as personally relieved - to hear my friend's response. If I was a demonstrator and wanted to make a bit of a splash in that money making place (by the way another bit of annoying reporting is to call Hong Kong a 'city'; in neither sense of the word is that true: even HK island is only 26% built on, while you can hike for hours in other parts and never see a soul) I think I would target big business, Hong Kong's raison-d'etre. And you can't get much bigger than HSBC. Not only does it dominate the local banking scene, it even prints the local money - along now with the Bank of China. In a real sense HSBC symbolizes Hong Kong, its right in front of you when you get out of the Star Ferry and tourists are constantly being told by their guides that HSBC's head office in Central is the world's most expensive building.....

And how about the 'Shanghai' part, I hear you ask. Well that of course became a victim of the Communist revolution, but that's another story...

Fair cop, Gov! By Kit Villiers

It must have been sometime on that well-remembered Sunday that Mr K.K. Wong of Realty Gardens, 41A Conduit Road, telephoned Central Police Station to report that his car was missing, presumed stolen.

A couple of miles away and at about the same time I was also beginning to get somewhat worried: well, I thought, there's not much I can do about it now. I resolved to check with Tony's secretary next morning, and, if what I was beginning to suspect was true, I could quickly inform the police too.

Basically what had happened was that my boss at the time, Tony Grant, had kindly lent me his car while he was on holiday. He had handed over a set of Morris keys and said that his car was parked in the basement car-park at Realty Gardens. The Saturday after his departure I duly pitched up at his block of flats and found a Morris in the basement, and drove off. As I saw no other British car and the keys fitted, at first I never thought any more about it. A little nervous about driving with all those hills and the heavy traffic, I didn't in fact use the car at all after I'd got it over to my flat.

What had caused slight alarm was the fact that there was a child seat in the back. Tony had no young children.

I dashed into work early that Monday, and Tony's secretary rang the maid in Tony's flat. She went down to the basement, and confirmed my fears: his car was still there! I don't know if you have ever reported a crime to the police. It seems that the police (the Royal Hong Kong Police at any rate appeared at that time to fall into this category) are ill-equipped to deal with criminals confessing to their misdemeanours; their system could handle only calls from victims. 'Has your car been stolen?' the officer kept asking. 'No', I kept replying, 'I am the the thief!'

Having finally established the fact that I was the perpetrator of the dastardly deed, I was summoned to appear at Central Police Station the next morning. I had of course returned the the car in the meantime. Sub-Inspector Chan (who looked about 18) sat Mr Wong and me down together and made what I thought was a pretty sensible decision: if Mr Wong didn't complain of misuse of his property while in my possession within the next 24 hours I could regard the matter as closed. She asked me to hand over a few dollars for the petrol I'd used, and then I was dismissed. Luckily I heard nothing further.

And what had caused this (take your pick) confusion/mistake/crime? Well the fact is I didn't realise that Realty Gardens has two car-parks. When I made off with Mr Wong's car from Basement A, Tony's car was lurking all the time in Basement B, just beneath my feet. I guess I'll know next time!

By Kit Villiers