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Wolf in CEO’s clothing?

Often derided as a “wolf”, the new left-leaning Hong Kong chief executive C Y Leung could be a surprising force for good.

Hong Kong, June 2012

Hong Kong chief executive  elect C Y Leung at a post-election gathering

Hong Kong chief executive elect C Y Leung at an election gathering. Photo: Getty Images

LEUNG Chun-ying, who assumes office on 1 July as the new chief executive of the Hong Kong Special Administrative Region, is very different from his predecessors – but it remains unclear whether he is different in a good or a bad way.

When Mr Leung was ‘elected’ last March some newspapers across the border in Mainland China referred to him as Comrade Leung, a designation reserved for Communist Party members. This is a sensitive issue in Hong Kong where most people treat membership of the party with great suspicion. Mr Leung flatly denies that he is a Party member, despite a lifelong association with the leftist camp. Anyway the official line is that he is not and orders were rapidly issued to ensure that the tightly controlled Chinese media dropped the word ‘comrade’ from all reports concerning Mr Leung.

Whatever the true facts of the matter Leung Chun-ying is the first Hong Kong chief executive who is a true believer in the ideology of the People’s Republic of China and can trace support for the motherland back to his student days, which included the turbulent period of the 1960s when riots spilled over to Hong Kong from the Cultural Revolution. Being a leftist in those days was most certainly a matter of belief and not associated with the shameless opportunism of recent converts.

Stephen Vines

Stephen Vines

Whatever the true facts of the matter Leung Chun-ying is the first Hong Kong chief executive who is a true believer in the ideology of the People’s Republic of China and can trace support for the motherland back to his student days

Mr Leung’s predecessors had to play catch-up in expressing their support for the Beijing government. Tung Chee-wah, the first chief executive, is from a family who were stalwarts of the staunchly anti-Communist Kuomintang until their shipping empire was threatened with collapse and the PRC government came to their rescue. At this point, unsurprisingly, they discovered a greater affinity with the Chinese Communist Party.

The second, and current chief executive, Donald Tsang, was what used to be described in Communist literature as a ‘colonial running dog’. So avid was his commitment to the old regime that he took the rather unwise step of accepting a knighthood from the Queen just days before the Union flag was lowered over Hong Kong. As China’s scarlet five star flag was raised he discovered a greater Chinese patriotism but left himself vulnerable to taunts from the new masters, which necessitated a re-doubling of efforts to display his newfound loyalty.

All of this matters for those wishing to understand why Leung’s position relative to Hong Kong’s masters in Beijing is so different and it carries a number of interesting implications.

It should also be added that in the initial stages of the so-called election (with a mere 1,200 voters) that installed him in office, Beijing again turned to a colonial re-tread, in the shape of Henry Tang, as their preferred candidate. But he engaged in an impressive display of self-destruction, leaving Mr Leung as the sole alternative for the people who decide these things in Beijing.

China’s evident embrace of these colonial re-treads has two primary motives. On the one hand Beijing is well aware of the lingering discomfort among Hong Kong people over rule by Communist officials – after all the families who form the bulk of the population fled to the British colony precisely to avoid this fate. Control, the new masters have concluded, is far better exercised from behind the scenes.
On the other hand, and this is very typical of dictatorships, those in charge revel in the vulnerability of those who have to try that bit harder to prove themselves and live in fear of being reminded of their past transgressions. Stalin, it should be noted, spent a great deal of time studying the personal records of his subordinates to seek out weaknesses that could be used to keep them in line.

No doubt Mr Leung has some skeletons in his cupboard after a career of working in Hong Kong’s property industry. However he does not carry the burden of switched allegiance. You can even see this in his body language: whereas his predecessor literally appeared to be cringing when he met senior Chinese officials, Mr Leung is far more relaxed and looks serenely confident.

It also matters that he has not spent a lifetime in Hong Kong’s arrogant and stultifying bureaucracy where the habits of bureaucratic inaction and caution are deeply ingrained. Most bureaucracies are like this but Hong Kong’s unusually dysfunctional system makes bureaucrats into government executives who not only implement policies but are supposed to determine them.

The bureaucracy largely and sometimes shamelessly backed Mr Leung’s rival in the election, precisely because it instinctively fears change. It may be the case that the new leader needs to earn their trust or it could be said that he owes them no debt of gratitude. But, at the end of the day, they are good at carrying orders even if they don’t like them. This happened when Britain installed Lord (then plain) Chris Patten as the last Governor of Hong Kong who used the sheer force of his personality to get the civil service to do things they would very much have preferred not to do, especially in the area of opening up to the public.

Here is another major opportunity for Mr Leung to make a difference and early indications are that he will embark on a major reshuffle of the top posts and bring in more of his own people. The widely despised bureaucrat’s bureaucrat Stephen Lam has already announced that he will step down from the number two position in government, presumably wanting to go without being pushed.

Rather surprisingly Mr Leung has already demonstrated a deft populist ability. He is literally out and about on the streets and, again, unlike his predecessors, has shown an ability to speak confidentially and fluently in both Chinese and English

Rather surprisingly Mr Leung has already demonstrated a deft populist ability. He is literally out and about on the streets and, again, unlike his predecessors, has shown an ability to speak confidentially and fluently in both Chinese and English in ways that politicians from more normal systems master after a long training in election politics, something he lacks. Moreover he is carefully doing the rounds of the political parties, consolidating support from allies and working to neutralise opponents.

All of this begs the substantive question of how Mr Leung will use the power and influence that he brings to the new job. He is far from being an unknown entity but even those who have a long personal association with him say that he remains elusive in many ways. Therefore it is possible to make no more than tentative assumptions about how a Leung administration will progress.

The first assumption is easy to make because of the remarkable optimism of Hong Kong people who have initially greeted each of the new chief executives, and former governors for that matter, with high expectations and enthusiasm. This provides a strong base for Mr Leung to assume office. He hit the floor running and gives every indication of wanting to make his mark with some speed, especially in the vital area of housing policy.

Secondly, although Mr Leung has had a taste of something vaguely associated with an election and campaigned as if it were a real poll, his entire background is one of distance from democratic politics. A staunch supporter of the Chinese Communist Party is unlikely to favour democracy in Hong Kong and Mr Leung is no exception. Indeed although he has managed to give plausible answers to questions surrounding a large number of policy issues he is notably evasive on the matter of introducing a democratic system election for Hong Kong.

Thirdly, and this is the big worry in many people’s minds, there is a pronounced streak of authoritarianism in the way that Mr Leung operates, which is why he has became colloquially known as ‘The Wolf’. He is smart enough to have pushed this character trait into the background but how long will that last? This is especially so in a situation where the office of chief executive has considerable power and relatively few restraints. If Mr Leung tires of what he sees as political squabbling and obstruction how long will it be before he lapses into the sullen posture of his predecessors who almost stopped talking to those who disagreed with them? The difference in Mr Leung’s case is that he is likely to build more of a political base with his fellow leftists who are well organized and have been looking for a leader to crush the democrats who are weakly organized and split yet in all open elections have managed to collectively secure more votes than anyone else.

Fourthly, there is the elephant in the room. The theory and indeed the constitutional structure of the Hong Kong SAR postulates the existence of ‘one country, two systems’. Meaning that while sovereignty over Hong Kong unambiguously resides with China, Hong Kong is supposed to have its own system of government, that retains autonomy over internal affairs.

Almost from day one of the new order this autonomy was reduced as the first chief executive began the practice of referring all decisions up to Beijing for endorsement or otherwise. Mr Tsang closely followed this practice. The net result has been not only a considerable slowing down in the process of government but Beijing, initially reluctant to meddle in every little Hong Kong matter, has now adopted a position of greater enthusiasm for indirectly governing Hong Kong.

Will Mr Leung attempt to recover some of this autonomy and does he even want to do so? There are some cautious grounds for optimism here, not least because the new chief executive does not appear to take kindly to becoming the kind of puppet that his predecessors became

So, the big questions are: will Mr Leung attempt to recover some of this autonomy and does he even want to do so? There are some cautious grounds for optimism here, not least because the new chief executive does not appear to take kindly to becoming the kind of puppet that his predecessors became and secondly because he genuinely believes that the current system of government is dysfunctional.

He is also better qualified to make the case that he is to be trusted to be a real chief executive because of his background and unflinching loyalty to the Chinese state. And the reality is that he only needs to assert a level of authority, which is enshrined in Hong Kong’s mini-constitution, called the Basic Law.

Of course these matters are not and will not be directly discussed, it will be more a case that actions speak louder than words. So, if Mr Leung simply goes ahead and does things without seeking approval from up North he will, in effect, have changed the dynamics of the relationship.

Strangely much of the current discussion about Mr Leung’s relationship with the masters in Beijing revolves around the non-issue of improving economic integration but this is moving at a relentless pace and even a monkey installed in Hong Kong’s Government House would not derail this process.

Meanwhile there are the other big power groupings in Hong Kong to be dealt with – the small clutch of tycoons rooted in the property business. There are even suspicions that the new boss’s aim here is to replace the old tycoon class with a new so called ‘red tycoon’ class from across the border, an increasingly powerful coterie.

Most of the old tycoons supported Mr Leung’s opponent in the election so no debts of gratitude are owed here. And because of Mr Leung’s background as a surveyor and head of his own property services company, he has had extensive dealings with these people and knows them well. First indications are that they will have a far less easy ride in the Leung administration, not least because they may not be able to get the backing of Beijing they previously enjoyed. It was they who persuaded the masters in the North that the hapless Henry Tang would make an admirable chief executive and this has badly damaged their credibility. Moreover their unrelenting greed is threatening to cause social unrest in Hong Kong and this is something Beijing is determined to avoid at all costs.

Therefore the time may just have come to keep the tycoons in check and even to establish a more independent relationship with the nation’s leaders. It cannot be said with confidence that this will happen but if it does Leung Chun-ying has the prospect of departing from his post with higher opinion poll ratings than he managed to secure when he assumed office. His predecessors have suffered the exact reverse fate and to this day seem puzzled as to why this is so. Indeed it must be galling to know that the last Hong Kong leader to depart with overwhelming public support was the last colonial governor, Chris Patten.

That hardly seems right.

Stephen Vines is a Hong Kong based journalist, writer and businessman. He is the presenter of a weekly current affairs television programme – The Pulse – broadcast in HK and is a commentator with newspapers and a number of international radio and TV stations. Vines was the Deputy Business Editor of The Observer and has worked for the The Guardian, The Independent, The Daily Telegraph and the New York-based Daily Deal. He is the author of a number of books including Hong Kong: China’s New Colony and a study of the Asian financial crisis called The Years of Living Dangerously. His latest book, Market Panic was republished in 2008. Stephen Vines was the founding Chief Editor of Eastern Express, a mould-breaking daily newspaper published in Hong Kong. He was also a founder and publisher of the satirical Spike magazine.

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