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JULY 21, 2000 VOL. 26 NO. 28 | SEARCH ASIAWEEK A Crisis of Credibility Tung Chee-hwa's stumbles raise doubts about whether he should seek another term as Hong Kong's leader. But are there viable alternatives? By SANGWON SUH and YULANADA CHUNG Hong Kong Every morning, Hong Kong Chief Executive Tung Chee-hwa gets up and scans the newspapers, soaking in what is happening around the special administrative region (SAR). He then flips to the "LTT" -- line to take -- page prepared by his assistant and briefs himself on the government's stance on a wide spectrum of issues. Joshua Law, Tung's former private secretary, notes that his ex-boss is picking up the rhythm of the job. "Three years ago, when he first stepped inside the Legislative Council to explain his policy objectives, he was uneasy," Law recalls. "We went to great lengths to make sure he was well briefed. Now he's learning to play his role with greater confidence." But apparently he is learning too slowly. Hong Kongers have been growing impatient with his administration -- and are making their feelings known vociferously. In recent weeks, labor activists, teachers, doctors, middle-class homeowners, pro-democracy politicians, students and senior citizens, all of whom have interests affected by Tung's action or inaction, have crammed outside government offices to vent their discontent. On July 9, more than 10,000 civil servants took to the streets to decry their boss's plan to reform the bureaucracy. Tung's popularity rating has fallen to an all-time low: Only 38%, against 50% the same period last year, approve of his performance. The chief executive hasn't helped his case with his well-publicized gaffes. He recently disclosed in a press interview that a controversial housing policy to build 85,000 apartments annually had been withdrawn -- in 1998. The reversal of this plan, a cornerstone of Tung's agenda when he took office in 1997, caught everyone by surprise -- including his own policy secretaries and top advisers, who apparently had not been told beforehand. Legislators demanded to know why such a major policy change had not been announced two years earlier. Subsequent assertions by government officials that the 85,000 target had not really been scrapped merely fueled the confusion and further damaged Tung's credibility. The chief executive's dipping popularity has raised questions over whether he is fit to run for re-election when his term ends in 2002. A June survey by the populist Democratic Party found that 51.6% of respondents would not back him for a second term. Yet the irony is that if he stands for office again -- as he is widely expected to -- he is very likely to get the job. Two weeks ago, Chinese President Jiang Zemin and Premier Zhu Rongji publicly expressed their satisfaction with Tung's performance and urged Hong Kong tycoons, who will play a key role in determining the next chief executive, to back the incumbent. In Hong Kong's quasi-democracy, that counts for more than the wishes of the masses, who have no direct say in the choice of their leader. Restrictions inherent in the SAR's political system were brought into focus last week when a carefully engineered "small-circle election" was held to form the Election Committee (EC). On July 9, 32,800 Hong Kongers (out of 168,000 eligible voters -- a 19% turnout) went to the polls to elect candidates to the 800-strong body (see story page 22). The EC, which is supposed to represent Hong Kong's various occupational, religious and political sectors, will pick six members of the Legislative Council (Legco) in September elections. (Of the 60 lawmakers, only 24 will be popularly elected.) More significantly, the EC is also likely to choose the next chief executive. The body's predecessor, the 400-member Selection Committee that anointed Tung as the SAR's first leader in 1996, was dominated by those with close ties to the mainland, thereby ensuring that Beijing's concerns were respected. It wasn't much different this time. When the poll results came in, the EC had a disproportionate number of businessmen and politicians friendly toward both Beijing and Tung. (Among the successful candidates: tycoon Li Ka-shing and his two sons.) But enough dissenting voices were voted into the body to make the election process for the chief executive not quite a rubber-stamping exercise. If the EC does eventually make the choice, it would mean that just 0.5% of Hong Kong's people participated in the process that resulted in the selection of their next leader. Coinciding with the civil servants' demonstration, the EC election served to highlight the gap that exists between popular aspirations and the token democracy of small-circle elections. Former government adviser Richard Margolis feels that the Sino-British Joint Declaration of 1984, which laid down the framework for post-1997 Hong Kong, has raised people's expectations and given rise to a protest culture. "The Declaration promises Hong Kong people ruling Hong Kong and people take it seriously," he says. "Local people have become more assertive." Indeed, the protests can be seen as more than just a forum for airing grievances; they are symptomatic of a system that gives people few other channels through which to express their political will. Tung's re-election may be virtually assured, but he is far from the people's choice and must reverse his unpopularity to prevent the gap from becoming a chasm. At the same time, Tung must press on with the very thing that is helping sink his approval rating: reform. Few dispute that reforms are long overdue in some sectors. Tung must wean Hong Kong off its dependence on real estate. (Since 1997, he and the Asian Crisis have halved the SAR's once-astronomical property prices.) The bloated, complacent civil service must be streamlined and made more accountable. A complete overhaul is sorely needed for the fossilized education system. And worsening air pollution must be stanched. To his credit, Tung has actively tried to tackle these issues. Last week, he vowed to press on with his reforms. "I think we have tried our best, but I think we can do better and we will do better," he told the local Canadian Chamber of Commerce. "We cannot stop and say — it's too difficult, let's not do it." But his drive has hit a wall of resistance, perhaps less because of the reforms themselves than the pace and the manner in which he has tried to implement them. Tung's move to cool property prices received broad support, for example. But his dogged refusal, amid the full fury of the Crisis, to scrap his policy to flood the market with cheap government-built flats soon turned both property developers and Hong Kong's homeowners against him. Tung's drive to reform the civil service upset the unions, because they felt they were not properly consulted. "He would point to the bad press about public servants slacking on their jobs," notes political commentator Lo Chi-kin. "He might think that would get him public sympathy, but it is bound to alienate his reform's target audience." Meanwhile, Hong Kong teachers have been up in arms because their views were not sought on the introduction of a language-proficiency test, aimed at improving the quality of Chinese and English among the teaching staff. "Tung sends us an e-mail saying he respects our opinion on reforms, but many of us don't even check our work e-mails," says secondary school teacher Chan Wing-lok. "We want face-to-face dialogue." This lack of consultation is perhaps typical of the aloof leadership style practiced by Tung. A local commentator has described his administration as a "big-boss" culture in which obedience and sycophancy are encouraged and dialogue and initiative discouraged. Former secretary Law admits that Tung has difficulty listening to others. "In the first two years, lots of senior officials asked him to do walkabouts and reach out to the public more," he says. Legislators, too, complain of Tung's detachment. Democratic Party leader Martin Lee Chu-ming says he cannot recall when Tung last met with his party. That may be no surprise, given that the Democrats are among Tung's most vocal critics; but even those considered close to the chief executive say they often are not invited for discussions. "It's ridiculous -- even we are not consulted," says James Tien Pei-chun, who heads the pro-business Liberal Party. That has fanned standing tensions between the government and Legco. Even though the legislature has a majority of parties with pro-government leanings -- a familiar complaint is that the administration always gets what it wants in the body -- Tung was recently unable to stop lawmakers from passing by a large margin a no-confidence vote against his two top housing officials over a construction scandal. Tien admits his party often comes under great pressure to vote according to government wishes. But, he adds, "if a senior official makes a mistake, he or she should be demoted or sidelined." Perhaps the biggest challenge facing Tung is the economic slump. Despite a pickup in the retail and real-estate sectors, confidence in the economy remains stubbornly elusive. Falling prices have been a boon for consumers, but while sales volumes have been rising for retailers, actual sales values have dropped. Meanwhile, high interest rates have been squeezing both homeowners and businesses. Moreover, the widening gap between the rich and poor complicates the picture. The fact that GDP growth spurted 14.3% in the first quarter of this year has not rung true to the grassroots. A study commissioned by Oxfam found that the number of marginal workers -- the unemployed and the underemployed earning less than $577 a month -- rose 42% between 1997 and 1999. "The poor can't sense any economic recovery at all," says Oxfam executive director Chong Chan-yau. "The wealth has not trickled down to the bottom. Hong Kong has never had such a wide gap." Ian Perkin, an economist at the Hong Kong Chamber of Commerce, says the pessimism is magnified by the fact that Hong Kongers are not used to deflation. "Many of the protests in recent weeks are due to deflation, especially asset-price deflation," he says. The lack of exposure to deflation makes Hong Kong people unable "to come to grips with it. They don't know if this is good or bad. They only have experience coping with inflation." But amid all the gloom, there has been one consistent bright spot in Tung's tenure so far: his good working relationship with Beijing, which has made "one country, two systems" largely a success. Critics, though, say he has managed this by simply toeing Beijing's line and accuse him of eroding Hong Kong's autonomy in favor of China's interests. But as far as respected commentator Wong Man-fong is concerned, Hong Kong's autonomy has benefited from the trust mainland leaders have in Tung. "Beijing won't give Hong Kong so much leeway if the chief executive is anyone else," says the former Taiwan and Hong Kong specialist at the Xinhua News Agency (Beijing's representative body in the SAR, now renamed the Liaison Office). "We can criticize, but we must always support Tung. That's in the best interest of Hong Kong." Not everyone is absolutely sure that Tung will continue to have Beijing's unqualified backing. Sunny Lo, a political science professor at the University of Hong Kong, says mainland leaders have yet to get the full picture of Tung's local unpopularity. When they do, the academic believes, they may have second thoughts about their candidate. "Beijing is fed information about Hong Kong from two channels: the Hong Kong and Macau Affairs Office and the Liaison Office," says Lo. "Do they really pass on an accurate and representative picture? I doubt it. They might report the good and sweep the bad under the carpet." He adds: "I would not over-interpret Beijing's remarks [on being satisfied with Tung's work]." A mainland businessman with interests in Hong Kong agrees. "If Tung's popularity keeps dipping or the economy slows down, what little confidence that remains in him will evaporate. Beijing would then be forced to consider another candidate." Most Hong Kongers are probably resigned to having five more years of Tung, after 2002. Even if Beijing has doubts about his leadership, there is no obvious alternative who is equally acceptable to the central government. Sighs managing director Shih Wing-ching of leading property agency Centaline: "I am a die-hard realist. Do we have a choice here [to vote for our chief executive]? I have no guts to stir up a revolution, so I've decided to go with the flow. I don't see anyone else who has Beijing's blessings." It is probably cold comfort to Tung that he is the best candidate by default. It is probably even less comforting that he has to occupy the unenviable position between his political masters' wishes and the masses' yearnings. Says commentator Lo: "If we had control over the outcome of a chief-executive election, I'd definitely boo him offstage." Fortunately for Tung, that is not going to happen. Unfortunately for him, the sentiment behind the remark has become highly combustible. Write to Asiaweek at mail@web.asiaweek.com
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