Dumping Tung

Mar 2nd 2005
From The Economist Global Agenda

The reported resignation of Hong Kong’s leader, Tung Chee-hwa, will be welcome news for the territory’s pro-democracy groups. But the timing of his departure shows how masterfully Beijing is controlling political events in Hong Kong

ILLNESS is likely to be given as the official reason for the resignation of Tung Chee-hwa, the “chief executive” of Hong Kong. But Mr Tung’s imminent departure—reported in Hong Kong’s press on Wednesday March 2nd, though not yet officially confirmed—seems clearly to have been ordered by the authorities in Beijing. They have seized upon a convenient moment to get rid of a leader whose ineptitude and unpopularity have only encouraged support for the territory’s pro-democracy movement.

Expectations had been growing for some months that Mr Tung would, for all his protestations to the contrary, step down before the expiry of his second term of office in 2007. The rumours gathered strength on Monday when Beijing re-appointed Mr Tung to the Chinese People’s Political Consultative Conference, a largely ceremonial body for officials retiring from day-to-day politics. Mr Tung had resigned from this body to take up the job of Hong Kong’s chief executive in 1997, when Britain handed its former colony back to China.

As the former head of a family shipping business that was saved from collapse by a loan backed by China, Mr Tung recommended himself through his loyalty rather than his abilities. And his lack of political acumen and administrative experience have shown up again and again in crisis situations, from the Asian financial meltdown in 1997-98 to the SARS virus outbreak in 2003 to recent popular pressure for democracy. Mr Tung also presided over six years of deflation and Hong Kong’s sharpest house-price fall in living memory. And while the local economy has recovered sharply over the past 18 months, his poll ratings have not.

In July 2003, half a million Hong Kongers took to the streets to protest at Beijing’s plans to impose an “anti-subversion law” on the territory—forcing Mr Tung to withdraw the measure. Alarmed at the size of the demonstrations, the mainland’s top leadership began to focus on Hong Kong and discovered just how unpopular and ineffective their man was. Last December, the Chinese president, Hu Jintao, criticised Mr Tung harshly over his failings, highlighting how disillusioned the mainland government had become with him.

If the fact of Mr Tung’s resignation is not so surprising, the timing is, to say the least, interesting. The reason why the Chinese leadership has decided to dump him now is that it has realised that Hong Kong’s election committee—the 800 grandees, many pro-Beijing, who choose the chief executive—completes its term of office in July. As Ivan Choy, a political scientist at the Chinese University of Hong Kong, points out, last time no fewer than 702 members of the committee nominated Mr Tung, despite strong popular opposition to him. Engineering the nomination of a new, equally compliant committee against the current background of popular democratic sentiment could prove tricky. Hong Kong’s local laws dictate that the election committee must choose a new chief executive 120 days after the resignation of the old one. It would thus be perfect timing for Beijing to have Mr Tung step down now, in time for the current, loyal committee to select a replacement before it is dissolved and replaced by a possibly less dependable bunch.

It is not yet certain if Mr Tung’s successor will serve a full five-year term (rather than simply filling in until Mr Tung’s term expires in 2007). But assuming Beijing ensures that he does, this will defer for several years a potentially incendiary debate on constitutional reform—including the question of direct elections for the chief executive. Such a debate, which would be highly embarrassing for China, would otherwise have been building up in the course of this year—Hong Kong is due to host a summit of the World Trade Organisation in December—and would have come to a head during preparations for the 2008 Olympics, which Beijing is hosting.

A speedy election also gives candidates who were preparing to fight in 2007 very little time to mount an effective campaign, making it more likely that Beijing’s preferred candidate, Donald Tsang, who is currently Mr Tung’s chief secretary, will become the next chief executive. Mr Tsang will automatically become interim chief executive when Mr Tung’s expected resignation comes into effect.

Though Mr Tsang is now clearly favoured by Beijing—President Hu gave him a six-second handshake during celebrations in Macau last December—it was not always so. David Dodwell of GolinHarris, a Hong Kong think-tank, says Mr Tsang had previously been seen as too close to the pre-1997 British colonial government, and that this had cast doubt on his loyalties to China.

While one of Mr Tsang’s leading colleagues, Anson Chan, resigned from government to become a pro-democracy gadfly, Mr Tsang himself has demonstrated his loyalty to his new, mainland masters. As financial secretary during the height of the 1997 financial crisis, he organised a government-sponsored fund that poured public money into the stockmarket, to support share prices. At the time, private investors were bailing out, in the belief that Hong Kong would have to abandon its currency peg to the American dollar. Not only did the peg hold, but the government made windfall profits when share prices subsequently recovered.

More recently, Mr Tsang has proved more deft than Mr Tung or other senior officials in dealing with the brouhaha over the anti-subversion law. Whereas Regina Ip, Hong Kong’s now-departed security chief, tried to railroad the bill through, only to cause a massive backlash, Mr Tsang has launched a lengthy consultation process, which has reduced the anti-subversion law’s potential to act as a rallying-point for the pro-democracy movement. “Beijing regards him as managing that very, very difficult process with great skill and competence,” says Mr Dodwell.

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