March 3, 2005

Face-saving finale to seven years of stagnation. Macau's success sealed chief executive's fate
By Eric Ellis

AFTER seven excruciating years observing Tung Chee-hwa bumble around Hong Kong, Beijing’s frustrated mandarins seem to have decided their placeman’s time is up.

Mr Tung has been an embarrassment for China’s leaders. They see the absorption of the former British colony into the motherland as part one of a grand strategy to be the first administration to unite the country, which means Taiwan also.

But they long ago lost faith in his ability to execute the Hong Kong part of that plan. Chinese leaders were simply awaiting the right moment to preserve “face” — his and theirs — before acting. In December, the new President of China, Hu Jintao, visited the former Portuguese colony of Macau, 30 miles from Hong Kong, to commemorate its fifth year back in Beijing’s control.

He noted that Macau’s gambling-based economy was booming while Hong Kong’s had been stagnant since China took over in 1997. He also noted how Macau had set a fine example by “patriotically embracing” the mainland.

Beijing’s problem was not that Mr Tung is a democrat; in fact he is not much of anything at all. He is at best a personable man, but he failed to win over Hongkongers. Mr Tung’s Shanghai ancestry also counted against him when Mr Hu replaced Jiang Zemin, who had risen to power through the Shanghai Communist party machinery. It was Mr Jiang who appointed Mr Tung to be Hong Kong chief executive in the year before the 1997 handover from Britain.

Mr Tung’s family of shipping magnates fled to Hong Kong after China’s 1949 Communist revolution and Hong Kong’s cheeky press corps never failed to ask him, now he was Beijing’s man in Hong Kong, whether he saw 1949 as the fall of China or, as the Communists would see it, the mainland’s liberation. Mr Tung would fudge his answer.

His other problem was that he had little to brag about. The day after he took over, Hong Kong’s economy crashed as the “Asian contagion” financial crisis of the late 1990s sent property and share prices plummeting, and unemployment soaring.

Hopes of recovery were dashed as Shanghai eclipsed Hong Kong as the Western-friendly entrée to the booming mainland. Only in the past year have asset prices returned to anything vaguely approaching those crazy last days when Britannia ruled her last Asian possession.

Not all Hong Kong’s problems have been of Mr Tung’s making but the 2003 Sars outbreak only cemented public dissatisfaction with his administration. That July mass protests against a Beijingsponsored anti-secession law took 500,000 demonstrators on the city-state’s streets. The protests galvanised Hong Kong’s prodemocracy movement and Mr Tung had to suspend the Bill’s passage through the local legislature. Beijing was not amused.

During his Macau visit, Mr Hu met Donald Tsang, Mr Tung’s civil servant deputy who is widely regarded as a competent administrator. Mr Tsang, who sports colourful bow ties, is a Hong Kong-born Roman Catholic and a relatively dynamic figure among technocrats. At 53, he is 14 years younger than Mr Tung.

Another attraction for Beijing is that he has discreetly discarded the knighthood that Britain awarded him in the last months of its rule.