A LEADING Hong Kong pro-democracy activist has called major firms like HSBC and Standard Chartered "short-sighted" for lobbying the UK government to ease its planned clampdowns on China.

A number of major British companies with connections to China are lobbying Rishi Sunak's government to tone down proposed measures on doing business in the country, two people familiar with the matter told City A.M.

The firms include banks HSBC and Standard Chartered, as well as insurance giant Prudential. The Confederation of British Industry (CBI) is also understood to be involved. All the groups and the Prime Minister's office declined to comment.

Executives are calling for China not to be included in the strictest risk category within new national security legislation, arguing it could hurt business and stoke negative publicity for firms that have ties to the communist-controlled country.

A source close to the lobbying efforts said the companies wanted to guarantee "the right balance of economic and national security interests".

"I think this is definitely a very shortsighted way of doing things," Nathan Law (pictured), a former member of Hong Kong's parliament now in exile in the UK told City A.M.

"We all know that China is a big business partner. But at the end of the day, it all has our liberal values and national security. And I think it is unwise to try and gain short-term economic rewards but give up the moral authority."

Law, one of the most prominent figures in Hong Kong's pro-democracy movement, fled to the UK in 2020 where he was granted political asylum.

News of the lobbying, first reported by Bloomberg, comes as ministers consider how to designate China under a National Security Act passed last year that aims to make firms' business with nations deemed a "potential risk to UK safety" more transparent.

"Increasing the transparency of any of these commercial corporations in mainland China, especially those entities that are connected to the Chinese government, is really important," Law said.

"China is very good at manipulating the power it has to exert influence and urge these companies to work for them."

London-based HSBC and Standard Chartered are among the biggest foreignowned financial firms operating in China.

"I am not surprised that as they are expanding aggressively in Asia, they want to please the Chinese government and help them to continue all those more covert actions of spreading propaganda or undermining democracy," Law said.

"HSBC has been quite notoriously compliant with Beijing and the Hong Kong government," Law concluded.

(c) 2024 City A.M., source Newspaper