HSBC CEO Raises Concern Over U.S. Administration Commitment to Free Trade
Geoghegan, a British citizen based in Hong Kong, cited a June 17 Pew Research Center poll, which showed that 84 percent of Chinese people thought they were better off in a free market economy, compared to 68 percent of people in the U.S.
“I just hope America plays its part and becomes what it should be,” Geoghegan said in a speech at Chatham House in London today. “It still is the world’s biggest economy, and it should be able to feel confident enough to let America trade with the rest of the world and let the rest of the world trade with America, because that’s good for everybody.”
Geoghegan’s comments come after Andy Grove, who oversaw Intel Corp.’s emergence as the world’s largest chip company, wrote in the July 5 issue of Bloomberg Businessweek that the U.S. needs a “job-centric political leadership” to boost employment. U.S. venture capital firms should have a partner for a “U.S. strategy” rather than a “China strategy,” Grove said.
“If the result is a trade war, treat it like other wars -- fight to win,” Grove wrote.
Geoghegan said the Chinese government is trying to boost domestic demand, which he said could create more opportunities for global companies.
“China realizes its greatest strength is also its biggest weakness, and that’s its export market,” Geoghegan said. “By growing its domestic market and consumption it’s able to give a better quality of life to its population,” Geoghegan said.
London-based HSBC posted a pretax loss of $7.7 billion in North America and a pretax profit of $5 billion in Hong Kong in 2009. The lender was founded in Hong Kong and Shanghai in 1865.
The HSBC CEO singled out Colombia, Indonesia, Vietnam, Egypt, Turkey and Saudi Arabia as attractive places to invest, describing them as the “Civets.”
The Group of 20 nations should be the “driving force” to promote free trade and establish common rules, he said.
“I’m somewhat puzzled by the G-20 when it says, ‘this is the new club, this is the new management of the world order,’ and then I see some of the club members not actually accepting what the club rules are,” he said.
Geoghegan questioned whether it was “wise” for the European Union “to go it alone” on setting remuneration for the finance industry and on setting its own capital ratios.
The Basel Committee on Banking Supervision meets next week in Switzerland to discuss new capital and liquidity rules for global banks. G-20 leaders are due to announce the new rules in Seoul in November.