Hong Kong media outlets feel Beijing’s pressure as ads vanish

By Michael Forsythe and Neil Gough  /  NY Times News Service, HONG KONG

Sat, Jun 14, 2014 - Page 9

In what may be a major escalation of pressure by Beijing on Hong Kong’s independently minded news media outlets, two major British banks have stopped advertising with one of the territory’s biggest newspapers, a top media executive said.

The executive, Next Media Limited commercial director Mark Simon, said HSBC and Standard Chartered ended longtime advertising relationships late last year with the Apple Daily Chinese-language paper, after being told to do so by the Chinese government.

“The [Central Chinese] government is running their business now,” Simon said in an interview. “HSBC and Standard Chartered don’t have to do what they did.”

Both banks said their advertising decisions were commercial.

The charge that politics may have played a role in the pullout illustrates the increasing power of the Chinese government to influence the behavior of not only its state-owned companies, but also of global companies, using the strength of its huge domestic market as a tool.

If true, it also reveals the hard-nosed tactics China’s central government will take to muzzle the relatively free news media in Hong Kong.

Next Media Limited, a newspaper, television and Internet company based in Hong Kong and Taiwan, is known for its strong advocacy of democratic freedoms in Hong Kong.

Simon said a representative from HSBC told him that the decision to stop advertising came after the deputy director of the central government’s liaison office in Hong Kong, Yang Jian (楊健), told the bank to end its advertising relationship.

A representative for the liaison office was not available to comment.

Under its owner, Jimmy Lai (黎智英), Next Media has been sharply critical of the Beijing government. On Wednesday, for example, an animated video on its Web site excoriated a policy paper on Hong Kong issued by China on Tuesday.

Called High degree of autonomy becomes total rule from Beijing, the video warned of increasing control by the Chinese Communist Party (CCP) in Hong Kong.

Anson Chan (陳方安), who served as the chief secretary — the second-highest-ranking official in Hong Kong — under the British colonial government and in the new administration, has been asking the banks in recent months about the advertising pullout.

Chan is an advocate for news media freedoms and for universal voting rights in Hong Kong.

In letters reviewed by the New York Times, senior executives at the two banks told Chan that advertising decisions were commercial. However, neither refuted Simon’s contention that the decision to end the advertising relationship was politically motivated.

“They certainly did not provide the assurances I was seeking,” Chan said.

“An international bank like HSBC and Standard Chartered... If you act this way, it is the first step down a very slippery slope,” Chan said in an interview. “What happens the next time they call up and say: ‘We don’t like you doing business with certain clients?’ Are you also going to cave in?”

Hong Kong media organizations critical of the mainland have said for years that the central government was pressuring advertisers to withdraw financing. However, the government’s targets in those cases were Chinese companies, many state-owned, that had little choice but to obey Beijing.

Losing HSBC and Standard Chartered, which were until last year among Next Media’s biggest financial advertising clients, has hurt the Hong Kong-listed company.

The two banks had spent a combined US$3.6 million last year on Next Media advertising before HSBC’s spending ended in August and Standard Chartered’s ended in December, Simon said. Neither has advertised since.

“Our decisionmaking regarding deployment of marketing is based on commercial considerations with respect to the purpose of the campaigns involved and target segments,” Gareth Hewett, an HSBC spokesman based in Hong Kong, said in a statement.

Gabriel Kwan, a spokeswoman at Standard Chartered, said, “It’s a marketing decision.”

HSBC and Standard Chartered’s advertising covered not just the group’s flagship Apple Daily newspaper print edition, but also magazine and Internet ads. Apple Daily’s Web site is one of the most widely visited in Hong Kong, with 1.5 million daily unique users, stock exchange filings show. And both banks maintain large retail and trading operations in Hong Kong, with their namesake skyscrapers planted in the center of the city’s central business district.

The “H” in HSBC stands for Hong Kong, but the “S” stands for “Shanghai,” and both HSBC and Standard Chartered have been expanding in China after rules restricting foreign banks were relaxed as a condition for China’s entering the WTO more than a decade ago. HSBC has also relocated thousands of so-called “back-office” workers to the mainland.

Simon said two local advertisers, Bank of East Asia and Hang Seng Bank, an HSBC subsidiary, also stopped advertising at about the same time as HSBC and Standard Chartered last year.

Simon’s accusations, reported in the Sydney Morning Herald, come in the face of increasing apprehension in Hong Kong about the encroaching influence of China in its economic and political affairs, and a surge in attacks against journalists.

A poll released in April found that for the first time in a decade, most Hong Kong residents disapproved of the way the central government in Beijing was handling its relations with Hong Kong.

In February, Kevin Lau (劉進圖), the former editor-in-chief of Ming Pao, who had been pushed aside the previous month, was attacked by assailants wielding cleavers, the weapon of choice of the territory’s organized crime gangs.

In June last year, a vehicle rammed into the front gate of the Hong Kong home of Lai, the Next Media owner, and an ax and a knife were left at the scene. Thousands of Apple Daily newspapers were set on fire in two separate cases that month. The company detailed the events in an animated video.

Additional reporting by Chris Buckley