The message is clear – China rules, OK?
This much became plain when Xinhua, China’s official news agency, announced the appointment of Sir Donald Tsang Yan-kuen as Hong Kong’s chief secretary for administration half an hour before the press conference in Hong Kong.
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Antony Leung Kam-chung |
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Just 48 hours earlier Sir Donald – though no one in the politically correct special autonomous region of China addresses him as a British knight – Hong Kong’s financial secretary, told local university students that he did not want to succeed Anson Chan Fang On-sang as the chief secretary and had asked chief executive, Tung Chee-hwa, to find someone else.
Then came Xinhua’s announcement that Tsang would assume the post from April. At the same time, Tung said that Sir Donald would himself be succeeded as financial secretary by Antony Leung Kam-chung, a professional banker who is Asia-Pacific chairman of JP Morgan Chase.
Anson Chan is the most popular official in Hong Kong, in stark contrast to chief executive Tung, who consistently gets low marks because he is perceived as wooden, unimaginative and has surrounded himself with a group of unelected, unaccountable supporters. But Tung is Beijing’s man and Chinese leaders had already let it be known that they want him to serve another term long before next year’s election by a carefully-picked committee of 800. Chan was publicly upbraided in Beijing last year and told to give Tung more support. A decent interval after that she decided to leave to spend more time with her family, cutting her term short by 15 months.
In this context, the 56-year-old Tsang, often called Dapper Don in the Hong Kong press – and not just because of his trademark bow-tie – was playing an astute game. By creating the impression that he had reluctantly moved and only after supplications from Tung, he strengthened his hand. Most legislators agreed that there was no realistic alternative to Tsang to take charge of the 190,000 strong government; there was no one else with the ability, knowledge and experience to match his 34 years as a civil servant. However, it will be tough for Tsang to move from the world of business and finance, where he is internationally respected, to the bigger and more political job. He becomes chief operating officer of the government of a freewheeling city that has big brother China closely monitoring its every move and with a CEO who has won a reputation of caring more for Beijing’s views than those of the 6.5 million people of Hong Kong.
Nevertheless, Tsang cleverly laid down a few markers in front of Tung. “I am conscious that Mrs Anson Chan is a hard act to follow… what Anson has done will continue to inspire me and my colleagues to work doubly hard and do our very best in serving Hong Kong. On the question of freedom, human rights and rule of law, I don’t think I have to compromise. Nor do I think Mr Tung would want me to compromise,” he said. He added that a “free and unfettered flow of information and civil liberties” were “an inseparable part” of Hong Kong’s success. To underline that he had support from China, Tsang pointed out that: “I was told by the chief executive that I was appointed by Beijing, so I think that is clear evidence that I have the trust of the central government.”
Altogether, this was an impressive start from someone who has been called a yes-man, partly because of his habit of addressing Tung Chee-hwa as louhbaan, the Cantonese for boss.
Financial secretary designate Leung may be a more interesting appointment. In spite of his experience as a banker, he was not immediately hailed as an inspired choice. Although there is the precedent of Sir John Bremridge, who became financial secretary from the private sector without any experience as a civil servant, there is a key difference. Bremridge had retired as taipan of Swire. Leung is just 49 years old and is thought to have political ambitions, in spite of his denials. He is already a member of Tung’s executive council and thus regarded as one of the supporters of Hong Kong’s boss. He acknowledged that he was close to Tung when he said, “If he (Tung) wasn’t reelected, I don’t have to commit hara-kiri, but of course I would know what to do.”
His professional career has been entirely as a banker, which is why some politicians, suspicious of the role of banks in creating the bubble economies of the mid-1990s, were lukewarm in their praise. Leung is a Hong Kong University graduate and former student activist who considered going to do graduate work at the London School of Economics – which he thought was sufficiently leftist for him – until Citibank lured him with a job and money.
He stayed with Citibank until 1995, rising to be the bank’s Asia-Pacific head based in Singapore, until Chase Manhattan hired him. He was appointed an executive councillor in 1997 when Hong Kong cast off its British colonial ties and became a special autonomous region of China. In that role he won a good reputation for leading the effort to reform Hong Kong’s education system.
He also attracted attention as a man with ambitions. But in a 1997 interview with the South China Morning Post, he denied that he wanted to become a politician: “I am not the right character. I talk too much and say what I think,” he said. “I’d be finished very quickly if I went into politics.” But in Hong Kong under Chinese sovereignty, it is not the elected politicians but the appointed rulers who hold the power. At such a young age, why should Leung take a sevenfold pay cut – from $2 million a year at JP Morgan Chase to just HK$2.45 million as financial secretary – if he does not have ambitions of climbing higher?
As financial secretary on a three-year contract, at least Leung does not have to worry about being removed from office by a carping legislative council. The council has no power to sack the top officials, by passing a vote of no confidence for example. But he has quickly discovered that the new job involves its share of sacrifices apart from pay. The lively Hong Kong media soon reminded him that his life was now under public scrutiny. More lurid newspapers highlighted the fact that Leung is separated from his wife and claimed that he had a girlfriend. “I have signed the divorce papers… but the girl who was reported as my girlfriend is a colleague of mine and has been for more than 10 years.
She is a very nice and caring friend. I had to apologise to her husband this morning,” Leung said. He admitted that he had underestimated the tenacity of the paparazzi. “It was the day before the announcement. I deliberately left through some secret channels, but the next thing I knew there was a motorcycle behind me. It suddenly dawned on me that I would have no freedom from now on.”
Even the more sober press quickly picked on a remark that he had had fierce arguments with financial secretary Tsang as an executive councillor and member of the Exchange Fund advisory committee. “Sometimes, our relations are like a collision between Mars and Earth, as both us are strong-minded,” he said.
As financial secretary, Leung will have plenty of opportunities to prove himself. He will inherit massive foreign exchange reserves of almost $100 billion cultivated through years or prudence with public finances in spite of low tax rates.
Hong Kong is facing a small, but potentially chronic, budget deficit with low tax rates and a small tax base thanks in part to a widening gap between the rich and poor.
Moves in February to cut income levels for qualifying for public housing and to reduce land sales were greeted with cries that the government was trying to boost the economy by pandering to its rich property-owning friends.
In the face of this, Leung ambitiously declared that: “My aim is to provide economic opportunities for the many, not just the few.”
