The Second Chief Executive of Hong Kong SAR-Evaluating the Tsang Years 2005-2012 9789629374990, 9789629372033

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Evaluating the Tsang Years  2005–2012

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The Second Chief Executive of Hong Kong SAR 

Evaluating the Tsang Years 2005–2012 Edited by Joseph Y. S. CHENG

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©2013 City University of Hong Kong All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, Internet or otherwise, without the prior written permission of the City University of Hong Kong Press. ISBN: 978-962-937-203-3 Published by City University of Hong Kong Press Tat Chee Avenue Kowloon, Hong Kong Website: www.cityu.edu.hk/upress E-mail: [email protected] Printed in Hong Kong

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Tabl e o f C ont ent s

1. Has He Got the Job Done? An Evaluation of Donald Tsang Administration

Joseph Y. S. CHENG



1

2. Expanding and Destroying the Accountability System

Joseph W. P. WONG

31

3. The Hong Kong Legislative Council — A Friend or an Enemy of Donald Tsang? 59 Jermain T. M. LAM 4. Structural Weakness of the Executive-led Model — Governance and Party Politics of Hong Kong Chi-kit CHAN

85

5. Political Marketing Campaigns of Chief Executive Donald Tsang — The Challenges of Managing Legitimacy Deficit under a Semi-democratic Regime

Brian C. H. FONG

113

6. Leadership — Job Done, Leadership Pledge Unaccomplished

Chris YEUNG

139

7. Governance and Public Policy under the Donald Tsang Administration — Critical Voices from the Christian Community in Hong Kong

Shun-hing CHAN

171

8. Can Hong Kong Design a New Growth Engine? A Study of the Absence of Economic Policies of the Donald Tsang Regime

Yin-wah CHU, Alvin Y. SO

199

9. Review of the Health System

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Grace CHENG

229

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

10. Urban Renewal

Adrienne LA GRANGE, Federik PRETORIUS

273

11. Housing Policy in the Tsang Administration

Ngai Ming YIP

319

12. Got the Controversial Urban Planning Jobs Done? An Institutional Perspective

Mee Kam NG

347

13. Actively Travelling to Sustainable Mobility

Michelle MA, Ronald LAU, Vincent CHAN

375

14. Labour and Employment in the Tsang Administration

Olivia K. M. IP, Sek-hong NG

409

15. Social Welfare — A Widening Care Gap

435

Raymond NGAN

16. Environmental Protection in Donald Tsang’s Era — Waiting for the Daybreak? Kin-chung HO

455

17. Navigating the Grey Area — Hong Kong’s External Relations under the Tsang Administration

Simon SHEN

469

18. Epilogue

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Joseph Y. S. CHENG

495

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D e t ai l e d C h a pt er C ont ent s

Foreword — Donald Tsang’s Greatest Debt to Hong Kong Audrey EU

xix

Preface Joseph Y. S. CHENG

xxi

List of Acronyms and Abbreviations

xxiii

List of Illustrations

xxix

Chapter 1 Has He Got the Job Done? An Evaluation of Donald Tsang Administration Joseph Y. S. CHENG

1. Why Donald Tsang?

1

2. Donald Tsang’s Philosophy of Governance

4

3. The Widening Gap between Rich and Poor and Social Harmony

11

4. Social Cleavages and Collusion between the Government and Big Business

17

5. Political Reforms and the Erosion of the HKSAR’s Autonomy

22

6. Differential Treatments and the Recruitment of Talents

26

7. Conclusion

28

Chapter 2 Expanding and Destroying the Accountability System Joseph W. P. WONG

1. The Original Accountability System

31

2. Righting the “Wrongs” of the Tung System

32

3. Renaming and Expanding the Accountability System

34

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

4. The Foreign Passport Saga

36

5. Overpaying Under-qualified Political Talents

36

6. The Beginning of the End for Donald Tsang

37

7. The Leung Chin-man Case

38

8. Mid-term Review of the Performance of New Political Appointees

40

9. The Godfrey Row

42

10. A Super Civil Service in Practice?

44

11. Representing the Central Government or the Hong Kong People?

51

12. A Brief Rebound That Was Not Sustained

52

13. Taking the Government’s Proposal to the People?

54

14. New Political Culture or Old Unfulfilled Promise?

55

15. Public Evaluation of the Accountability System

56

16. Conclusion

57

Chapter 3 The Hong Kong Legislative Council — A Friend or an Enemy of Donald Tsang? Jermain T. M. LAM

1. Introduction

59

2. HKSAR Legislative Council — An Adversarial Legislature vs Donald Tsang

61

3. Chief Executive Tsang’s Record in the Legislative Council

70

4. Impact of the Adversarial Executive — Legislative Relationship on Governance

77

5. Conclusion

82

Chapter 4 Structural Weakness of the Executive-led Model — Governance and Party Politics of Hong Kong Chi-kit CHAN

1. Introduction

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85

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Detailed Chapter Contents

2. Basic Law and Executive-led Governance

86

3. Tsang Administration — Cracks in Executive-led Governance?

90

4. Who Fooled Donald Tsang?

91

5. Internal Strife of Pro-establishment Camp

94

6. Fragile Alliance and Governance Quality

98

7. Avoiding Controversies?

103

8. Party Politics and Governance

106

9. A Ruling Party for Hong Kong?

107

10. Epilogue — Not Only a Matter of Candidate

110

ix

Chapter 5 Political Marketing Campaigns of Chief Executive Donald Tsang — The Challenges of Managing Legitimacy Deficit under a Semi-democratic Regime Brian C. H. FONG

1. Introduction

113

2. Theoretical Review —  From Political Marketing to Image Manufacturing

115

3. Political Marketing Comes of Age —  The Growing Trend of Poll-driven Politics under the Donald Tsang’s Era

117

4. Pragmatic leadership —  The Political Marketing Campaigns of Donald Tsang

120

4.1 The Permanent Campaign of Donald Tsang —  Stepping out of Government House

120

4.2 Appealing to the Support of Pragmatic Majority —  Donald Tsang’s Message of “Pragmatic Politics”

122

5. Popular Support Building on Sand —  The Challenges of Managing Legitimacy Deficit under a Semi-democratic Regime

124

6. Conclusion

132

7. Epilogue

133

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Chapter 6 Leadership — Job Done, Leadership Pledge Unaccomplished Chris YEUNG

1. Introduction

139

2. Beijing, Hong Kong Expectations

144

3. Self-reinvention of Donald Tsang

147

4. The Jury is Out on Economic Leadership

150

5. It’s Livelihood, Stupid

153

6. Politics and Governance: “Give Me the Tools”

157

7. The Straightjackets of “One Country, Two Systems”

162

8. The Verdict

166

Chapter 7 Governance and Public Policy under the Donald Tsang Administration — Critical Voices from the Christian Community in Hong Kong Shun-hing CHAN

1. Introduction

171

2. On Governance Philosophy

173

2.1 Hindering Institutional Development

173

2.2 Slanting towards the Business Sector

174

2.3 Shirking Responsibilities in Economic Activities

175

2.4 Cronyism in Recruiting Members into Advisory and Statutory Bodies

175

3. On Public Policies

176

3.1 Institutional Development

176

3.2 Human Rights

179

3.3 The Livelihood of the People

186

4. Concluding Remarks 4.1 The Catholic Church’s Expectations for the SAR Government

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Detailed Chapter Contents

4.2 The Hong Kong Christian Council’s Expectations for the SAR Government

xi

195

Chapter 8 Can Hong Kong Design a New Growth Engine? A Study of the Absence of Economic Policies of the Donald Tsang Regime Yin-wah CHU, Alvin Y. SO

1. Introduction

200

2. Policies of Economic Development — Donald Tsang Regime

202

2.1 Technology and Innovation

208

2.2 Cultural and Creative Industries

210

2.3 Financial Services

211

3. Policy Inertia — Institutional Origins

212

3.1 Bureaucratic Polity —  Beliefs in Positive Non-intervention

214

3.2 Bureaucratic Polity — Research Deficit

216

3.3 Bureaucratic Polity —  Bifurcation of Political Appointees and Civil Servants

219

4. Policy Inertia — Socio-political Constraints

221

4.1 The West Kowloon Cultural District

221

4.2 The Decline of Legitimacy in the Tsang Regime

223

5. Conclusion

225

Chapter 9 Review of the Health System Grace CHENG

1. Introduction

229

2. Changing Paradigm in Health, Health Determinants and Healthcare

229

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

3. Health System Financing in Hong Kong

232

3.1 Trends in Government Financing on Healthcare since 1997

233

3.2 Public/Private Share in Health Financing

233

3.3 Expenditure by Providers/Functions

236

3.4 Population Entitled to Medical Benefits Declined

238

4. Performance of the Health Delivery System

239

4.1 Access and Quality of Care

239

4.2 Private Out-patient Services

240

4.3 Public General Out-patient Services

242

4.4 Public SOPCs

243

4.5 Accident and Emergency Service

245

4.6 Public and Private Hospital Utilisation

249

4.7 Inpatient Satisfaction

252

4.8 Health Outcomes

252

5. Regulation of Medical Practice and Patient Complaint Mechanisms

253

5.1 Regulating Medical Practitioners

254

5.2 Public Hospital Complaint and Feedback Mechanism

255

5.3 Private Hospital Registration

257

6. Health System Consultations and Policy Developments

258

6.1 Health Reform Consultations during the Tsang Administration

258

6.2 Primary Care Development Strategy

261

7. Will HPS work?

264

7.1 Shift from Public to Private Care for the Target Group Unlikely

264

7.2 Equity Issue

265

7.3 Cost Inefficiency of Private Insurance

265

7.4 Cost Control Difficult

266

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Detailed Chapter Contents

7.5 Further Pressure on Public Manpower Resources

267

7.6 Proven Efficiencies of Publicly Financed Health System Worldwide

267

8. Issues and Challenges 8.1 Failure to Demonstrate Commitment in Health Financing 8.2 Government Performance in Healthcare

xiii

268

268 269

8.3 Care Delivery Reform Strategy Reliant on Private Sector Care 269 through Health Insurance 9. Conclusion

271

Chapter 10 Urban Renewal Adrienne LA GRANGE, Frederik PRETORIUS

1. Introduction

273

2. Tsang’s Inheritance

277

3. Major Policy Initiatives of the Tsang Era

282

3.1 Urban Renewal Strategy Review

284

3.2 The New Urban Renewal Strategy (2011) and the URA

286

3.3 The Revised Land (Compulsory Sale for Redevelopment) Ordinance (2010)

291

3.4 Building Maintenance Initiatives

291

3.5 Community-based Initiatives

293

3.6 Tracking Studies

293

3.7 Relocation Assistance

294

4. Evaluation

294

4.1 The First (“Old”) and the New Urban Renewal Strategy

295

4.2 The Revised Land (Compulsory Sale for Redevelopment) Ordinance (2010)

302

4.3 Will the New URS and a Revised Ordinance Accelerate Urban Renewal?

308

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

4.4 Redevelopment

309

4.5 And the Other Rs?

310

5. Conclusion

312

Chapter 11 Housing Policy in the Tsang Administration Ngai Ming YIP

1. Introduction

319

2. What Tsang Inherited from Tung

320

3. The Housing Market in the Tsang Administration

326

4. Public Housing

334

5. The (Lack of) Achievements in Housing Policy

341

6. Concluding Remarks

344

Chapter 12 Got the Controversial Urban Planning Jobs Done? An Institutional Perspective Mee Kam NG

1. Introduction

347

2. Discussion Framework — Lefebvre’s Triadic Space and Healey’s Institutional Analysis in Place Governance

349

3. Controversial Planning Issues in the Tsang Era

352

3.1 Harbour Reclamation Controversies

352

3.2 Urban Renewal

358

3.3 West Kowloon Cultural District

363

4. Conclusion

371

Chapter 13 Actively Travelling to Sustainable Mobility Michelle MA, Ronald LAU, Vincent CHAN

1. Introduction

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375

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Detailed Chapter Contents

2. Transport Planning and Policy

377

2.1 Transport Strategy

378

2.2 Comprehensive Transport Study

390

2.3 Administrative Machinery

392

3. Actively Travelling to Sustainable Mobility

394

3.1 Active Transport System

394

3.2 Promoting Cycling in Hong Kong

398

3.3 Electronic Road Pricing

403

4. Conclusion

xv

407

Chapter 14 Labour and Employment in the Tsang Administration Olivia K. M. IP, Sek-hong NG

1. Introduction

409

2. Labour Economy and Labour Market

410

2.1 Economic Background —  Fading Competitiveness of the SAR?

410

2.2 Key Labour Market Features

412

3. Labour Policy and Labour Legislation

418

4. Overview and Some Observations

426

5. Postscript

430

Chapter 15 Social Welfare — A Widening Care Gap Raymond NGAN

1. Investing for a Caring Society — Myth and Realities

435

2. A Neo-liberalist and Neo-conservative Stance on Welfare

436

3. Moving from “Free Trade” and “Positive Non-intervention” to “Big Market, Small Government”

441

4. The Growing Wealth Gap

447

5. Review and Retrospect — Where is the Caring Society?

450

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Chapter 16 Environmental Protection in Donald Tsang’s Era — Waiting for the Daybreak? Kin-chung HO

1. Introduction

455

2. Environmental Governance in Different Phases

457

2.1 Phase I (2005–07) —  Taking Advantages of the Tung Administration

457

2.2 Phase II (2007–10) —  Disabled Environmental Governance under the Leadership of Non-professional Secretaries and Administrative Officers (AOs)

459

2.3 Phase III (2011–12) —  Doing the Last-minute Jobs to Make the Transcript More Beautiful

463

3. Global Environment vs Regional Environmental Cooperation

464

4. Conclusions

467

Chapter 17 Navigating the Grey Area — Hong Kong’s External Relations under the Tsang Administration Simon SHEN

1. Background

470

2. Cases

473

2.1. Hong Kong as Asia’s World City

473

2.2 The Role of Hong Kong in Global Security and Anti-terrorism

475

2.3 Communicating with Taiwan

477

2.4. Welcoming the Russian President — An Unexpected Visitor

480

2.5 Defending the Diaoyutai Islands

481

2.6. The Manila Hostage Crisis — Calling a “Family Friend”

484

2.7. The Congo Trial — Sovereign Immunity?

487

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Detailed Chapter Contents

3. Conclusion — Lack of Vision, or Lack of Coordination?

xvii

488

3.1 Centralised External Relations Unit within the Government of the HKSAR in the Future?

489

3.2 Serving Chinese National Interests through Hong Kong External Relations

492

Chapter 18 Epilogue Joseph Y. S. CHENG

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F o r e wo rd

Donald Tsang’s Greatest Debt to Hong Kong When Professor Cheng asked me to write a foreword for his book on Donald Tsang, my immediate memory flashback was how the civil servant of over 40 years ended his career mired in the embarrassing array of lavish entertainment in private yacht, jet, posh hotel and questionable arrangement for his retirement penthouse. I am less concerned with his personal reputation than his promise to Hong Kong. Did he “get the job done” as per his election pledge? Professor Cheng will in this book present in-depth analysis into various social issues — the widening wealth gap, economic development and the six new industries, housing and constitutional reform. My main concern is that Donald Tsang as the head of Hong Kong failed to safeguard the principle of “One Country, Two Systems”. In 2010, he invited me to take part in a live televised debate on constitutional reform. The invitation was addressed to me as the chief spokesman of the five district de facto referendum. He refused to have a live audience so I insisted on at least a phone-in session. The first caller was direct: “Are you our Chief Executive or are you a puppet on a string? Why do you allow the central authorities to negotiate direct with our legislators? ‘One Country, Two Systems’ exists in name only!” Donald Tsang dodged the question by reiterating the central authorities’ promise that there would be constitutional development in 2012. Hong Kong people had to decide on what to do, hence it was necessary to negotiate, discuss and consult. “One Country, Two Systems” have been successfully implemented. It is indisputable that the Liaison Office of the Central People’s Government in Hong Kong SAR had been intermeddling into Hong Kong internal affairs. Protest marches have switched from Central Government

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

Offices in Central to the China Liaison Office in Western District. Increasingly Hong Kong people begin to wonder if we have entered into the era of “Western governing Hong Kong”. The proof came with our current Chief Executive C. Y. Leung when he paid a long high profile visit to the China Liaison Office the next morning right after he was elected. There is no doubt where the boss is. Hong Kong is part of the “One Country”. But if our Chief Executive is not there to defend our systems and our values, we the people, have to take up the fight.

Audrey EU Chairman Civic Party

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F o r e wo rd

In an “executive-led” system of government with limited democracy, public opinion remains a very important means of checks and balances enforcing accountability. Informed public opinion demands research and analysis; and academics are in a good position to provide this service to the community, hence this volume to access the performance of the Donald Tsang administration. It is hoped that it will make a small contribution to a better understanding of Hong Kong people’s problems and the search of their solutions. Donald Tsang enjoyed high popularity when he first became Chief Executive, reflecting Hong Kong people’s trust for the civil service. But then the community’s evaluations of his performance continued to deteriorate; and his popularity ratings fell sharply in the final months of his tenure. He was not even appointed to the National Committee of the Chinese People’s Political Consultative Conference upon his retirement, as Beijing and the local establishment were dissatisfied with his performance too. Seven years of inaction in housing, pension system, and long-term finance of medical services, etc. have exacerbated the territory’s socioeconomic problems and widened the gap between the rich and poor. Real estate speculators as well as ordinary people, for example, now understand that a modest increase of housing supply would have to wait two to three years, and an adequate land supply to satisfy the housing demand would take ten years. During his administration, the society had become more polarized and many people felt their core values threatened. Corruption has certainly become a more serious problem; and it is sad to see the second Chief Executive referred to as “the greedy Tsang” by the media. A team of academics was formed to offer an initial evaluation of the performance of the Tsang administration and examine the deep-seated

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problems of the territory. The task of assessment is complicated and many factors have to be taken into consideration, including the Chinese leadership’s Hong Kong policy and the global economic environment. One should not just blame the Chief Executive. Meaningful discussion will continue to improve our understanding of the issues; and history will likely provide a more macro and balanced evaluation of the Tsang administration. I would like to take this opportunity to thank all the authors for their support and co-operation. As editor, I am most grateful to the staff of the City University of Hong Kong Press, especially Patrick Kwong and Edmund Chan, for their professionalism and dedication throughout the publication process.

Joseph Y. S. CHENG Chair Professor of Political Science City University of Hong Kong

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A c r o n y m s an d Ab b revi at i ons

A&E

Accident and Emergency   245

ACDDI

The Action Committee for Defending the Diaoyu Islands   482

ACE

Advisory Council on the Environment   459

AO

Administrative Officer   220

APEC

Asian Pacific Economic Cooperation   466

AQI

Air Quality Index   464

AQO

Air Quality Objectives   456

CCI

Cultural and Creative Industries   205

CCLA

Hong Kong Catholic Commission for Labour Affairs   172

CDM

Clean Development Mechanism   466

CE

Chief Executive   435

CEDB

Commerce and Economic Development Bureau   204

CEPA

Closer Economic Partnership Arrangement   5

CEPD

Council for Economic Planning and Development   218

CEPT

Chemical Enhanced Precipitation Treatment   456

CFA

Court of Final Appeal   354

CITB

Commerce, Industry and Technology Bureau   209

CME

Continuing Medical Education   263

CPG

Central People’s Government   117

CPU

Central Policy Unit   217

CREC

China Railway Engineering Corporation   487

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

CSSA

Comprehensive Social Security Assistance Scheme   186

CSI

Container Security Initiative   476

CTS

Comprehensive Transport Studies   377

DAB

Democratic Alliance for the Betterment and Progress of Hong Kong   43

DP

Democratic Party   24

DRC

Democratic Republic of Congo   487

DURFs

District Urban Renewal Forums   283

ECFA

Economic Cooperative Framework Agreement   479

EIA

Environmental Impact Assessment   456

EIPA

Expression of Interest in Purchasing Arrangement   288

ENB

Environmental Bureau   460

EPA

Environmental Protection Agency   455

EPD

Environmental Protection Department of Hong Kong   455

EPU

Environmental Protection Unit   455

ERL

Guangzhou-Shenzhen-Hong Kong Express Rail Link   367

ERP

Electronic Road Pricing   404

EFTA

European Free Trade Association   492

ETOs

Economics and Trade Offices   489

ETWB

Environment, Transport and Works Bureau   392

FATF

Financial Action Task Force   476

FSI

Family Solidarity Index   449

FTA

Free Trade Agreements   491

FTU

Federation of Trade Unions   80

GC

Geographical Constituency   65

GD

Guangdong   204

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Acronyms and Abbreviations

GDP

Gross Domestic Product   10

GOPC

GP Out-Patient Clinic   242

GP

General Practitioner   240

GPS

Global Position System   384

HA

Hospital Authority   232

HA

Housing Authority   278

HAPCC

Housing Authority Public Complaints Committee   255

HATS

Harbour Actions and Treatment Strategy   458

HEC

Harbourfront Enhancement Committee   355

HKCC

Hong Kong Christian Council   173

HKHS

Hong Kong Housing Society   279

HKKF

Hong Kong Kowloon Ferry   388

HKPRI

Hong Kong Policy Research Institute   477

HKRA

Hong Kong Reparation Association   482

HKSAR

Hong Kong Special Administrative Region   1

HKU

University of Hong Kong   141

xxv

HKU POP Public Opinion Programme, the University of Hong Kong   37 HMDAC

Health and Medical Development Advisory Committee   258

HOS

Home Ownership Scheme   159

HPS

Health Protection Scheme   260

HZM

Hong Kong-Zhuhai-Macao Bridge   205

ICAC

Independent Commission Against Corruption   226

IFP

Invitation for Proposals   365

III

Institute for Information Industries   217

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

IPCC

Independent Police Complaints Council   183

iProA

Internet Professional Association   43

ITF

Innovation and Technology Fund   205

ITRI

Industrial Technology Research Institute   218

JSCC

Justice and Social Concern Committee   173

KISDI

Korea Information Society Development Institute   218

LDC

Land Development Corporation   277

LegCo

Legislative Council   161

LFPR

Labour Force Participation Rates   415

LPG

Liquefied Petroleum Gas   386

LSD

League of Social Democrats   69

MCHK

Medical Council of Hong Kong   254

MoEA

Ministry of Economic Affairs   217

MPF

Mandatory Provident Fund   436

MTR

Mass Transit Railway   378

MWO

Minimum Wage Ordinance   410

NPC

National People’s Congress   488

NPCSC

Standing Committee of the National People’s Congress   2

OAA

Old Age Allowance   439

OECD

Organization for Economic Cooperation   238

Pan-PRD

Pan-Pearl River Delta Development   203

PCO

Primary Care Office   262

PHI

Private Health Insurance   259

PHO

Protection of the Harbour Ordinance   353

POAS

Principal Officials Accountability System   26

PPP

Polluter Pays Principle   457

PPWK

People’s Panel on West Kowloon   364

PRC

People’s Republic of China   86

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Acronyms and Abbreviations

PRD

Pearl River Delta   204

QF

Qualification Framework   418

R&D

Research and Development   204

RMB

Renminbi   203

RTHK

Radio Television Hong Kong   23

SAR

Special Administrative Region   142

SARS

Severe Acute Respiratory Syndrome   4

SDC

Sustainable Development Council   459

SEN

Secretary for the Environment   459

SETW

Secretary for the Environment Transport and Works   458

SIAs

Social Impact Assessment   289

SIIS

Shanghai Institute for International Studies   493

SMEs

Small and Medium-sized Enterprises   425

SOPC

Specialist Out-Patient Clinic   240

SPH

Society for Protection of the Harbour   353

SST

Social Service Teams    290

TfL

Transport for London   398

THB

Transport and Housing Bureau   379

TPS

Tenant Purchase Scheme   322

TSS

Transport Subsidy Scheme   381

UNFCCC

United Nations Framework Convention on Climate Change   465

URA

Urban Renewal Authority   276

URS

Urban Renewal Strategy   276

WHO

World Health Organization   231

WITSS

Work Incentive Transport Subsidy Scheme   381

WKCD

West Kowloon Cultural district   205

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L i s t o f Il l u s t rat i ons

Figures Figure 5.1

Rating of Chief Executive Donald Tsang (June 2005–June 2012)   128

Figure 5.2

Hypothetical Voting of Donald Tsang as Chief Executive (June 2005–June 2012)   128

Figure 9.1

Total Health Expenditure by Source (1997/98–2006/07)   235

Figure 9.2

Mix of Private Health Expenditure (1997/98–2006/07)   236

Figure 9.3

Public and Private Share of Health Expenditure by Function (2001/02 and 2006/07)   237

Figure 9.4

Patient Attendances at Primary, Secondary and Tertiary Care Points in Hong Kong (1997–2010)   242

Figure 9.5 Patient Attendances at Specialist Out-patient Clinics (1997–2010)   244 Figure 11.1 House Price and Affordability   328 Figure 11.2 Land and Private Housing Supply   331 Figure 11.3 Production of Public Rental Flats and Public Housing Waiting List   336

Tables Table 1.1

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Hong Kong People’s Evaluations of Donald Tsang (The Chief Executive), the HKSAR Government, and the Central People’s Government, as Reflected by Public Opinion Surveys (2005–10) (Half-yearly Averages)   15

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Table 3.1

Performance of the Pro-establishment Camp in Geographical Constituency Elections 66

Table 3.2

Success Rate of Legislation (2005–12)

Table 4.1

Voting Patterns of Democrats, Pro-Beijing, and Business and Professionals Camp 96

Table 4.2

Policy Agenda of the Donald Tsang Administration (2007–10) 104

Table 5.1

Donald Tsang Political Marketing Activities (March 2005–December 2011) 121

Table 5.2

Content Analysis of Donald Tsang’s Political Rhetoric (March 2005–December 2011) 125

Table 5.3

Public Rating and Support for Donald Tsang and Alan Leong 127

75

Table 5.4 Public Appraisal of Donald Tsang and Alan Leong

127

Table 8.1

Economic and Auxiliary Policies as Presented in Donald Tsang’s Policy Addresses (June 2005–November 2010) 204

Table 8.2

Four Key Industries and Six Emerging Sectors

Table 9.1

Government Expenditure on Health (1997/98–2010/11) 234

Table 9.2

Waiting Time for A&E Services in Public Hospitals

Table 9.3

Hospital Utilisation in Hong Kong 251

Table 9.4

Complaints Feedback on Medical Services, AII HA Hospitals (1998–2011) 256

Table 9.5

Hong Kong Health Policy Consultations and Developments during the Tsang Administration (June 2005 to January 2011) 259

213

247

Table 10.1

Building Safety and Maintenance Schemes

Table 10.2

Objectives of Building Safety and Maintenance Scheme 315

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314

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List of Illustrations

Table 10.3

Summary of URA Programmes    316–317

Table 10.4

New Developments (Based on Current Plans)   318

Table 11.1

Housing Related Initiatives in the Policy Addresses of the Tsang Administration   343

Table 12.1

Controversial Planning Jobs Done in the Past Decade   368–370

Table 13.1

Information on Various Railway Projects   379

Table 13.2

Number of Buses Classified by Emission Standards (April 2012)   387

Table 13.3

Contrasting Approaches to Transport Planning   395

Table 13.4

Cycle Tracks under Planning in Hong Kong   402

Table 14.1

Statistics on Labour Force, Unemployment and Underemployment   411

Table 14.2

Unemployment Rate of 15–19 Age Group   413

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Table 14.3a Employment Distribution by Industry (2005, 2009, 2010) 414 Table 14.3b Labour Force by Age Group (2005, 2009, 2010)   415 Table 14.4a Labour Force and Labour Force Participation Rate by Sex 416 Table 14.4b Labour Force and Labour Force Participation Rates (LFPRs) by Sex   416 Table 14.5

Percentage Change of Nominal and Real Wages: 2004–10 (%)   418

Table 15.1

Economic Stimulus Recovery Packages in Hong Kong   445

Table 15.2

GDP Growth Rate and Poverty Population, Hong Kong (2005–10)   446

Table 15.3

Median Household Income Levels in Hong Kong (2001–11) 447

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C h a pt er 1

Has He Got the Job Done? An Evaluation of Donald Tsang Administration Joseph Y. S. CHENG Chair Professor of Political Science Department of Public and Social Administration City University of Hong Kong

1. Why Donald Tsang?

When C. H. Tung was forming the first government of the Hong Kong Special Administrative Region (HKSAR), the political gossip reported in the media was that he would not wish to retain Donald Tsang, the colonial Financial Secretary, Peter Lai or Lam Woon-kwong in his cabinet. He was subsequently advised by Beijing that, for the sake of political stability, he should retain all the members of the previous British administration. When Donald Tsang formally became the Chief Executive on 21 June 2005, members of the pro-Beijing united front who were dissatisfied with him pointed out that, upon his departure as the last governor, Chris Patten had followed convention by asking that knighthoods be bestowed on his Chief Secretary and Financial Secretary, the latter accepted and the former declined. The message was that Donald Tsang had no expectations in the

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future HKSAR government while the Chief Secretary, Anson Chan, still entertained higher political aspirations.[1] In 1999, Anson Chan was expected to step down upon reaching the retirement age. The pro-Beijing united front was about to celebrate her anticipated departure, while Michael Suen was expected to succeed Anson Chan as the Chief Secretary for Administration. However, it was said that the Beijing officials responsible for Hong Kong affairs were not confident of C. H. Tung’s political competence, and Anson Chan was specially invited to stay to support the Tung administration. The arrangement apparently did not work out. Stories of C. H. Tung and Anson Chan not getting along soon became an open secret in the territory’s political circles. The open guidance given by the central leadership to Anson Chan to “better support” the work of the Tung administration during her visit to Beijing was perceived as evidence of the truth of this gossip. When Anson Chan finally retired in 2002, Donald Tsang was given the blessings of Beijing and C. H. Tung to succeed her. During the crisis of the “Article 23” legislation, the central leadership strongly supported C. H. Tung.[2] Yet after the crisis, Tung’s performance still proved to be unsatisfactory and he was forced to resign for health reasons. He was succeeded by Donald Tsang. According to the Standing Committee of the National People’s Congress (NPCSC), the remaining years of Tung’s second term would be Tsang’s first term; hence he could only be re-elected one more time, and his administration would last for a maximum of seven years, not twelve. In his re-election campaign in 2007, Donald Tsang adopted the slogan “I will get the job done”. Commentators observed that this probably reflected his mind-set. Since he treated this as a job, naturally he would follow the demands of his superiors in Beijing, and one could not expect any mission

1. In July 1995, Anson Chan, Chief Secretary for Administration of the British administration, secretly visited Beijing. 2. See Joseph Y. S. Cheng, “Introduction: Causes and Implications of the July 1 Protest Rally in Hong Kong”, in his edited volume, The July 1 Protest Rally: Interpreting a Historic Event, Hong Kong: City University of Hong Kong Press, 2005.

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or commitment on his part to fight for the rights and welfare of the people of Hong Kong. In his earlier civil service career, Donald Tsang demonstrated well the loyalty of an employee. As a civil servant of the British administration, he was perceived as an arrogant colonial bureaucrat by members of the proBeijing united front who never had a good impression of him. This loyalty ultimately secured him the position of Financial Secretary in the final years of the British administration. With the C. H. Tung administration, despite the fact that Tung initially wanted to exclude him, he eventually secured sufficient trust to be promoted to succeed Anson Chan as Chief Secretary for Administration. It was often reported in the media that Liao Fei, head of the State Council’s Hong Kong and Macau Affairs Office, had been Donald Tsang’s most important supporter, despite the fact that the pro-Beijing united front in the territory disliked him. Obviously, after the return of Hong Kong to the motherland, Tsang succeeded in winning the trust of the principal Beijing official responsible for Hong Kong. One has to admire Donald Tsang’s skill in securing the trust and support of his superiors; and his assumption of the Chief Executive position again demonstrated the significant influence of Beijing in the HKSAR government’s personnel decisions. In the transitional period in the 1980s, the Chinese leadership originally planned the joint cultivation of the HKSAR government’s first leaders with the British administration. However, after the Tiananmen Incident, Chris Patten as the last Governor pushed for further democratisation in the territory. This angered Beijing which broke the co-operation and decided to “build another stove”, i.e., it would cultivate Hong Kong’s future leaders on its own.[3] According to the initial plan, the future leaders of the HKSAR government would mainly come from the civil service. The Sino-British confrontation over Hong Kong during Chris Patten’s administration meant that Beijing could not accept the top civil servants groomed by Patten; its targets then switched to the business leaders and

3. Lo Chi-kin, “From Through Train to Establishing Another Store” in Joseph Y. S. Cheng and Sonny Lo Shiu-hing (eds.), In Transition to 1997: Hong Kong’s Challenges, pp. 37–46

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C. H. Tung was subsequently chosen. The failure of Tung prompted the Chinese leaders to look for his successors from among the top civil servants whose administrative competence and experience were treasured by Beijing. On this basis, Donald Tsang was selected.

2. Donald Tsang’s Philosophy of Governance When Donald Tsang succeeded Tung, the territory’s economy had already recovered from the recession caused by the Severe Acute Respiratory Syndrome (SARS) epidemic. Hence he was under no pressure to “save” the economy and to introduce a stimulus package. At the end of 2004, Hong Kong’s unemployment rate dropped to 6.7% from the peak of 8.6% in the previous year. The labour force actually expanded to a historical record of 3.3 million. Cases of negative equity, i.e., property owners whose down payments for their mortgages had been more than wiped out by the decline in the values of their properties, such that the values of their loans exceeded the values of their properties used to secure the loans had fallen from a peak of over 100,000 to about 25,000 in September 2004. This reflected a rebound in the property market, and that many middle-class families had been relieved from a significant financial burden.[4] Donald Tsang’s philosophy of governance was revealed, to a considerable extent, by his first policy address released in October 2005.[5] He indicated that his administration would pursue “excellent governance, a harmonious community and widespread economic growth”. After the massive protest rallies in 2003 and 2004, as well as the shelving of “Article 23” legislation, Donald Tsang pledged “to secure a ‘people-based’ government”, “strengthen co-operation between the Administration and the Legislative Council”, and to “strengthen the role of District Officers to foster community spirit and to better solve local problems”.

4. See the final policy address delivered by C. H. Tung on 12 January 2005 entitled “Working Together for Economic Development and Social Harmony”; see South China Morning Post, Apple Daily, Ming Pao, Hong Kong Economic Journal, and all major local newspapers of the following day for commentaries. 5. See the policy address delivered by Donald Tsang on 12 October 2005 entitled “Strong Governance for the People”; see all major local newspapers of the following day for commentaries.

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Regarding the pursuit of “excellent governance”, Donald Tsang did not have many concrete proposals to offer. He suggested a reduction in the establishment of the civil service and improvement of its efficiency; but he also indicated that he planned to create “a small political cadre with the Administration to support the work of the Chief Executive and Principal Officials”, i.e., more political appointments. In the past, Donald Tsang had been skilful in managing expectations, especially while he was Financial Secretary. He stated that the number of policies and measures would not be significant. What was important was how many measures would be successfully implemented. The focus of his administration would be to help “the economy power ahead” under the principle of “big market, small government”; and its strategy would be to “leverage the Mainland and engage ourselves globally” as well as to “encourage entrepreneurship and fair competition”. Apparently Donald Tsang wanted to avoid the impression of his predecessor having major plans in the economic arena, although he finally supported the Cyberport and Disneyland projects while he was Financial Secretary, and the West Kowloon cultural complex project while he was the Chief Secretary for Administration. In the initial years of the Tung administration, the civil service headed by Anson Chan was not enthusiastic about strengthening economic co-operation with the Mainland; and the Guangdong authorities were unhappy with this neglect. When Donald Tsang became the Chief Executive, the entire territory was acutely aware of the significance of this co-operation. The Closer Economic Partnership Arrangement (CEPA) concluded in June 2003 was considered a “big gift” from the central leadership to Hong Kong to help maintain political stability through economic prosperity, as Chinese leaders believed that economic growth would reduce the discontent of Hong Kong people. A new measure introduced by the Donald Tsang administration was to set up a Mainland Affairs Liaison Office in the Constitutional Affairs Bureau, to co-ordinate regional co-operation between Hong Kong and the Mainland, as well as the work of the Beijing office and other offices, especially their liaison work with the central and local governments in the Mainland.

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In the Eleventh Five-Year National Economic and Social Development Programme (2006–10) released by the central government in early 2006, Hong Kong was mentioned for the first time. Donald Tsang organised a summit meeting the following September as a discussion platform to facilitate the full exploration of the economic opportunities available in the Mainland to promote Hong Kong’s development. Later, in July 2003, when the Guangdong Party Secretary Zhang Dejiang initiated the PanPearl River Delta regional co-operation scheme, Hong Kong also actively responded. Certainly it was too late to discuss how to better co-ordinate with the central government’s economic plan after its release. Regarding the following Twelfth Five-Year Development Programme (2011–15), the Tsang administration followed the practice of the provincial governments in the Mainland and engaged in lobbying the central government in the very early drafting stage of the programme to secure policies favourable for Hong Kong, especially in the field of renminbi businesses. The central leadership has been according a high priority to Hong Kong’s economic prosperity, as it believes that political stability can be secured when people are satisfied with their economic conditions; it is eager to maintain investors’ confidence in the territory. But Hong Kong is already a mature economic entity; in the last decade its contribution to the Mainland’s economic modernisation has been in decline, and it is now perceived to be going to Beijing often to ask for favours. This is an embarrassment for the HKSAR government and Hong Kong people in general, especially when this point is raised by their counterparts in the Mainland. The Donald Tsang administration has certainly been more pro-active in co-operation with Guangdong, but Hong Kong has probably missed the best opportunities. Today the Guangdong authorities are eager to attract foreign direct investment from the leading multinational corporations which can offer high-tech, advanced management and overseas business networks for the province. Investment from Hong Kong is still welcome, but its value is less significant as the Guangdong authorities perceive that they are not short of capital investment. Informally many leaders of the Guangdong authorities and the local

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governments below them resent the earlier arrogance of the HKSAR government and its neglect of their enthusiasm for closer co-operation with the territory. Around 1997, they had enthusiastically tried to promote co-operation with Hong Kong but had been cold-shouldered. Now Hong Kong is suffering from a decline in international competitiveness and has re-discovered the need for economic co-operation with Guangdong. The above perception on the part of Guangdong naturally means that it is rather cool about Hong Kong’s recent more active approach to regional co-operation. Concerning the Pan-Pearl River Delta regional cooperation scheme, the other provinces tend to keep their options open and are reluctant to accept Guangdong’s leadership. There have been many conferences held, but actual progress has been limited. The focus of the business community regarding the HKSAR government’s philosophy of governance centres on its attitude towards intervention in the economy. The C. H. Tung administration obviously behaved as if it had the green light to be more interventionist. The messages embodied in Tung’s annual policy addresses were very much those of identifying business activities which were considered important, often significant enough to warrant governmental support in terms of public funding or land grants at below market prices. According to Tony Latter,[6] Donald Tsang appeared to have supported Tung’s interventionist orientations as his Financial Secretary. Conservative business leaders in Hong Kong subscribe to the doctrines of supply side economics. They believe that the government should only concentrate on the maintenance of a favourable business environment, cultivate the talents needed through the education system, and ensure that the development of the infrastructure will meet the demands of the economy. They oppose the “picking of winners” by the government, i.e., identifying and supporting specific industrial sectors. In his policy address in 2009, Donald Tsang identified six industries for support, namely; education services, medical services, testing and certification services, environmental industries, innovation and technology,

6. Tony Latter, Hands On or Hands Off? The Nature and Process of Economic Policy in Hong Kong, Hong Kong: Hong Kong University Press, 2007, p. 36.

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and cultural and creative industries.[7] This was unprecedented; how this strategy and practice would affect the HKSAR government’s role in the economy has yet to be observed. But the government had no effective mechanisms to promote and support the development of these six industries; the entrepreneurs in these sectors criticised the government for the lack of co-ordinated measures; and Hong Kong people considered the government’s strategy empty talk. In comparison, Japan and the other “three little dragons of Asia” have ample resources at the disposal of their governments in support of their strategic industries.[8] They enjoy a strong influence on their respective domestic banking and financial systems, and are thus able to direct preferential loans to the strategic sectors. These governments have stateowned enterprises or government-linked corporations, and some of them have sovereign wealth funds too which can directly participate in the development of strategic industries. Even if the community had endorsed the identification and support of strategic sectors on the part of the HKSAR government, the Donald Tsang administration obviously conveyed an impression of being overambitious and lacking careful planning. Given the handicaps of the HKSAR government in comparison with its counterparts in Japan and the other “three little dragons of Asia“, it was hardly in a position to promote six strategic industries simultaneously; to say the least, there would be no economy of scale. In the case of education services, for example, the Tsang administration could only offer two small pieces of land in the urban areas to provide for 4,000 student places; the tertiary education sector considered that far from sufficient to promote education services as an export of services following the Australian model. Many cities in Mainland China and overseas metropolises have plans for university complexes or university towns to promote the development of education services, but these plans involve substantial resource inputs.

7. See the policy address delivered by Donald Tsang on 14 October 2009 entitled “Breaking New Ground Together”; see all major local newspapers of the following day for commentaries. 8. Chalmers Johnson, MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975, Stanford, CA: Stanford University Press, 1982.

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There is a view that Hong Kong should perhaps concentrate on only one or two strategic sectors at every stage. For example, Singapore in the past decade or so has been concentrating on its biotech industries with impressive results. The lack of planning is mainly due to inadequate policy research resources. Again, in comparison with the other “three little dragons of Asia”, Hong Kong has no major policy research think-tanks inside or outside the government. In the context of keen global competition, the development of a strategic industry demands sophisticated research and planning. The proposal to develop the six strategic industries from the Donald Tsang administration had not gone through any serious research and planning, and it was not much more than a slogan based on conventional wisdom. The development of new strategic industries must take into consideration the transformation of the territory’s industrial structure; otherwise the major local business groups remain focused on real estate and infrastructure projects. In the past two decades or so, there has been much discussion about the combination of Hong Kong’s capital and overseas networks with the Mainland’s research and development facilities to jointly develop high-tech industries, but no significant results have been seen. At this stage, major state-owned enterprises in the Mainland do not lack capital; the central government and various levels of local governments have all formulated their “going out (Zou chi qu, i.e., engaging the foreign markets)” strategies.[9] Hong Kong therefore does not have much to offer. When Donald Tsang delivered his policy address in October 2007, there was only one short paragraph on the six strategic industries. The Chief Executive merely stated that “we will continue to monitor the development of these six industries”.[10] By then, those who were worried about an

  9. See International Relations Department, Tsinghua University and Economic Diplomacy Research Centre, Tsinghua University (eds.), China’s Economic Diplomacy 2008, Beijing: China Economic Publishing House, 2008. 10. See the policy address delivered by Donald Tsang on 13 October 2010 entitled “Sharing Prosperity for a Caring Society”; see all major local newspapers of the following day for commentaries.

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

interventionist government might have their hearts at ease, at least for a while, because the Donald Tsang administration had less than two years to go. In the summer of 2010, because of the widening gap between rich and poor, there appeared some media discussions on the “hatred for the rich” among Hong Kong people. There was a suggestion from a business leader that the government should consider using its fiscal reserves to help the poor. As expected, there was no response from the Donald Tsang administration. Hong Kong’s substantial fiscal reserves are a pride of the government and the people. In contrast to the U.S. and Japan, the HKSAR government has not gone into debt and it has ample fiscal reserves. However, what level of fiscal reserves would be considered prudent? Besides ensuring a high degree of liquidity to meet the challenges of financial crises, what use do fiscal reserves have? On 6 March 2002, the then Financial Secretary, Antony Leung Kam-chung, indicated in his budget speech that “it should be sufficient to have fiscal reserves equivalent to around 12 months of government expenditure to meet operating and contingency requirements”.[11] At the beginning of the Tsang administration, i.e., in the early months of fiscal year 2007–08, the HKSAR government’s fiscal reserves were adequate for 19 months of its expenditure. However, when the then Financial Secretary John Tsang Chun-wah delivered his budget speech in February 2007, he suggested that a range of 30–50% of Gross Domestic Product (GDP) could be used as a “frame of reference”, which was equivalent to 18–24 months of government expenditure. John Tsang further commented that an extra 18 months’ worth of government expenditure might be required by 2030 as a cushion against the burden of an ageing population.[12] When the Euro area was established, its member countries were asked to reduce their respective government debts to a safe and sustainable level; and it was agreed that debts up to 60% of GDP were considered safe.

11. See all major Hong Kong newspapers on 7 March 2002. 12. See all major Hong Kong newspapers on 1 March 2007.

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According to Tony Latter, applying this criterion to Hong Kong would allow government borrowing of up to about HK$850 billion in 2007. In view of the fact that the government enjoys fiscal reserves of over HK$300 billion, this means that theoretically it can issue government bonds and mobilise HK$1.2 trillion for various worthwhile causes, like building the community’s social security net.[13] The Tsang administration and its successor certainly will not do this, and there is no such demand from Hong Kong people. But the above line of argument demonstrates that the government can afford to do much more to help prepare for the social security needs of an ageing population. In fact, in 2008 when the Tsang administration secured a budget surplus of HK$100 billion, Financial Secretary John Tsang decided to allocate HK$50 billion for a medical insurance programme to be advocated later by the government. This was a significant example of how fiscal reserves can be used to finance the community’s social security.[14] Throughout the years of the Donald Tsang administration, there were no serious discussions on the government’s fiscal reserves. Why was the range of 30 – 50% of GDP proposed by John Tsang a reasonable and appropriate level? How did he arrive at this “frame of reference”? If half of the government’s budget surplus could be allocated for a future communitywide medical insurance plan, can budget surpluses in future years be appropriated for similar purposes? Should the annual earnings of the fiscal reserves be considered regular fiscal revenues which can be used to meet regular government expenditure? The government and Hong Kong people support the general principle of keeping the wealth in the community, but how should this be implemented through concrete policies?

3. The Widening Gap between Rich and Poor and Social Harmony In 2001, the Gini coefficient in Hong Kong already reached 0.525; it is expected to be even higher at the time of writing in 2012. Normally a level

13. Latter, op. cit., pp. 51–52. 14. See all major Hong Kong newspapers on 28 February 2008.

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

exceeding 0.4 deserves caution; and the territory’s level is comparable to that in some Latin American countries. According to a document prepared by the local legislature, the Gini coefficient in Japan in 1993 was 0.249; that in Taiwan in 2000 was 0.326; that in South Korea in 1998 was 0.316; and that in Singapore in 1998 was 0.425.[15] In September 2010, a survey of the Public Opinion Programme of The University of Hong Kong revealed that only 23% of the respondents were satisfied with the government’s performance in “improvement of people’s livelihood”, a new low since the beginning of the Donald Tsang administration.[16] At that time, the latter was advertising the recovery of the economy estimating that economic growth in the year would reach 5–6%. In the same month, Oxfam in Hong Kong published its report on poverty in the territory, which showed that the number of working poor families had been increasing, from around 172,600 in 2005 to about 192,500, a rise of 12%. The report also indicated that the incomes of the poorest one-fifth of families had shown no improvement in the past five and a half years; and the median monthly incomes of the poorest one-tenth and one-fifth of families were HK$3,000 and HK$6,000 respectively. In comparison, the median monthly income of the richest one-tenth of families had risen by 16% to HK$80,900, about 27 times that of the poorest one-tenth of families, reflecting that the gap between the rich and poor had been widening since 2004.[17] In October 2010, the Hong Kong Council of Social Service released a research report, indicating that in the first half of the year the population of “poor families” in the territory reached 1.26 million, amounting to 18.1% of the population, a record high. The report also revealed that the median monthly income of the high-income household group had risen from

15. The data come from Legislative Council Factsheet FS07/04–05, compiled by the Research and Library Services Division of the Legislative Council Secretariat. 16. Ming Pao (Hong Kong Chinese newspaper) 29 September 2010. 17. Ibid. 20 September 2010. A working poor family is one which has at least one employed member; and its monthly income is less than half of the median monthly income of families in Hong Kong with the same number of members.

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HK$31,000 in the previous year to HK$32,950; while that of the lowincome household group had basically remained unchanged at HK$9,000. The income gap between the two groups had been maintained at the ratio of 3.4 : 1 in the past four years; but in the first half of 2010, it rose to 3.7 : 1. Apparently, the income gap worsened in the economic recovery after the recent global financial tsunami.[18] According to the Census and Statistics Department of the HKSAR government, in the quarter of September-November 2009, the number of households with a monthly income of HK$25,000 and above dropped from that in the corresponding period of the previous year; while the number of households in various groups with a monthly income of below HK$10,000 had risen, with growth rates ranging from 2.4% to 9.7%.[19] Earlier in August 2009, the Life Quality Research Centre of the Chinese University of Hong Kong released a set of statistical and survey data which demonstrated that the overall quality of life of Hong Kong people in the previous year had deteriorated to approximately the level in 2003, when the territory suffered severely from the SARS epidemic; and the overall index declined by 3.5% when compared with that in 2007. The community’s evaluation of the economy and its ability to purchase accommodation through mortgage had dropped most sharply, falling by 30% and 33% respectively; the index on satisfaction with the government’s performance also dropped by 29%.[20] Since most Hong Kong people accord top priority to the economy when their living standards fall, their evaluation of the Donald Tsang administration would naturally be adversely affected; and it appeared that it had become an established trend. Before the territory’s return to China, Hong Kong people rated the British administration highly. The colonial

18. Ibid., 4 October 2010. Poor families in this research report are defined as those with incomes equal to or less than half of the median incomes of families in Hong Kong with the same number of members; for example, one-person families during the survey period each with monthly incomes of HK$3,275 or less, two-person families each with monthly incomes of HK$7,100 or less, threeperson families each with monthly incomes of HK$10,000 or less, four-person families each with monthly incomes of HK$12,000 or less. 19. Ibid., 20 January 2010. 20. Ibid., 14 August 2009.

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

administration received a much better evaluation than that given to the British and Chinese governments; and the British government tended to secure a slightly better assessment than the Chinese government. Since Hong Kong’s return to the Motherland the situation has been reversed. In recent years, Hong Kong people have demonstrated a considerably higher degree of trust in the central government and a lower degree of satisfaction with the HKSAR government (see Table 1.1). In the past, the gap between the rich and poor in Hong Kong had been substantial. At the beginning of the 1970s, the Governor, Sir Murray MacLehose, made a substantial commitment in the public housing and education sectors, thus offering significant improvements in the quality of life at the grassroots level. But neither the British administration nor the community were attracted to the “welfare society” model. Most important of all, before the Asia-Pacific financial crisis in 1997–98, Hong Kong people considered the territory a place full of opportunities, where individuals’ efforts would be rewarded. Even those who lacked the educational qualifications and prospects for upward social mobility would still pin their hopes on their second generation, who hopefully would become professionals and business executives through tertiary education. The alleviation of inter-generational poverty has become a social issue only in recent years. In view of the globalisation process, Hong Kong understands that it has to become a knowledge economy. Hence the competitiveness of the loweducation, low-skill labour force has been in sharp decline; and the income gap of the labour force has been widening. In the economic integration between Hong Kong and the Mainland, the former’s labour-intensive industries moved to the Pearl River Delta in the early 1980s, and the labour-intensive services followed. Meanwhile, the inflow of immigrants from the Mainland expanded the supply of unskilled labourers with a low level of education, contributing to the phenomena of increased population of “working-poor" families, lack of improvement in incomes during the recent economic recovery, etc. In September 2010, a survey revealed that among the fourth-generation Hong Kong people (born between 1976 and 1990) interviewed, 20% had experienced downward social mobility in the past five years, i.e., moving down the occupational ladder. This downward movement was

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Table 1.1 Hong Kong People’s Evaluations of Donald Tsang (The Chief Excutive), the HKSAR Government, and the Central People’s Government, as Reflected by Public Opinion Surveys, 2005–10 (Half-yearly Averages) HK People’s Rating of Donald Tsang (A) Date of Survey

Supporting Rate

HK People’s Satisfaction with HKSAR Government (B) Very Satisfied/ Quite Satisfied

Very Dissatisfied/ Not Quite Satisfied

HK People’s Trust in Central Government (C) Very Trust/ Quite Trust

Quite Distrust/ Very Distrust

July-Dec., 2010

53.8%

31.3%

35.30%

41.70%

22.10%

Jan.-June, 2010

51.40%

29%

38.70%

43.70%

30.40%

July-Dec., 2009

52.90%

31.70%

32%

47.90%

16%

Jan.-June, 2009

53.90%

28%

31.20%

52.60%

15.40%

July-Dec., 2008

53.20%

27%

30%

53.10%

14.40%

Jan.-June, 2008

63.50%

47.60%

31.20%

54.90%

13.40%

July-Dec., 2007

64.90%

51.60%

29.60%

54.40%

15.60%

Jan.-June, 2007

66.10%

49.40%

14.10%

49.90%

15.50%

July-Dec., 2006

62.90%

42%

15.10%

44.60%

19.70%

Jan.-June, 2006

67.30%

51.50%

10.90%

48.50%

18.70%

July-Dec., 2005

67.40%

49.20%

12.60%

46.80%

24.40%

Jan.June,2005

72.3%

29.10%

28.80%

43.20%

24.70%

Notes: 1. Question asked for (A)—On the whole, do you support Donald Tsang? The other options were half-half and don’t know/ hard to say, which are not included in this table. 2. Question asked for (B)—Are you satisfied with the performance of the HKSAR Government? The other options were half-half and don’t know/hard to say, which are not included in this table. 3 Question asked for (C)—On the whole, do you trust the Beijing Centre Government? The other options were half-half and don’t know/hard to say, which are not included in this table. Source: Public Opinion Programme, The University of Hong Kong, http://hkupop.hku.hk/

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more conspicuous among the strata of low-skilled and unskilled workers, which constituted 44% of the group of affected interviewees. Over half of the respondents admitted that they had no opportunities for upward social mobility because of low educational qualifications. According to this survey, 51.9% of the fourth-generation Hong Kong people (assuming those who arrived at Hong Kong round about 1949 and before were the first generation) interviewed believed that they had failed to secure upward social mobility opportunities because of their “low educational qualifications”; 38.9% of the respondents blamed the Hong Kong economy; and 33.3% considered the fact that they had not worked hard enough and that faulty government policies were the root causes respectively.[21] It is relatively easy to understand that those with “low educational qualifications” lack upward social mobility opportunities; what about those with high educational qualifications? In recent years, there has been much media discussion on the frustrations and anger of the “post-80s” generation, including university graduates who were regarded as social elite. Naturally, the supply of university graduates has been increasing, and they have to adjust their expectations to avoid the scenario of “the higher the expectation, the bigger the disappointment”. In 2008–09, the median monthly salary of a fresh university graduate was around HK$11,000. If the young person stays with his or her parents, there is still some money to spend. The major grievance of young graduates is that, after working for ten years, their monthly salary may still stay at the level of below HK$30,000. Breakthroughs may occur during boom times, but their remuneration would often fall back to the usual level in economic difficulties. If, unfortunately, one becomes unemployed for more than half a year, there is a danger of being marginalised in the job market. Ownership of residential property is often beyond young professionals and executives with satisfactory incomes. In the spring of 2010, a young

21. Ibid., 13 September 2010. The survey was conducted by a consultancy firm commissioned by the Hong Kong Association of Professionals and Senior Executives in May–July 2010.

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couple complained in a radio phone-in programme that as a doctor and a lawyer (the most enviable professions in the territory) respectively, they could not afford to buy a flat. Donald Tsang suggested that they should consider the northwestern districts in the New Territories. The episode became a hot talking-point in the community for a while. Obviously the younger generation is not optimistic about its future.

4. Social Cleavages and Collusion between the Government and Big Business The pro-Beijing camp is generally unhappy with the performance of the Donald Tsang administration. Their major complaints are two: the Tsang administration has failed to tackle the broad structural problems of the economy; and it has allowed dissatisfaction in the community to accumulate, exacerbating various types of confrontations. Local media have observed that the central leadership appreciated the performance of the Edmund Ho administration in Macau more. From an ideological point of view, the pro-Beijing camp does not insist on upholding the economic philosophy of “positive non-interventionism”. It considers the China model a success, and believes that it is a good thing that the HKSAR government has the capability to engage in macro-economic adjustment and control. It looks for good results. At the same time, it is concerned with the gradual decline of the territory’s international competitiveness, and that the Tsang administration has been unable to turn the tide. The lack of achievements in the promotion of the six strategic industries and the limited success in economic co-operation with the Mainland are two of the foci of their criticisms. These criticisms are widely shared by the people of Hong Kong. They consider that the maintenance of the rule of law and the reliability of the territory’s financial system contributed to much reducing the potential damage of the Asia-Pacific financial crisis of 1997–98 and the global financial tsunami in 2008 – 09. However, Hong Kong has no significant new, innovative industries and services, and the greatest threat is a slow decline in its competitiveness.

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In early 2010, Beijing published a report on the development of provincial economic competitiveness in China in 2008 – 09. It indicated that Hong Kong’s ranking declined from the first in 2007 to second in 2008, surpassed by Taiwan and also witnessed a narrowing of its lead over Beijing and Shanghai. It was Shanghai that secured the central leadership’s endorsement to become an international financial centre in 2020, and Shanghai’s ambition has an impact on Hong Kong too. The territory realises that it has to extend its lead in the years ahead and consolidate its status as an important international financial centre, otherwise its competitiveness will be weakened. But besides asking for Beijing’s favorable policies in allowing Hong Kong to develop its renminbi businesses, the Donald Tsang administration does not have a credible response plan.[22] The exacerbation of social cleavages is in violation of the broad objective of developing a harmonious society. During the Tsang administration, there was no repetition of the large  scale protest rallies of 2003 and 2004, but the community’s evaluation of its performance has been far from impressive. Donald Tsang declared that he did not think much of public opinion polls on his evaluation, but the resource allocation of his personal staff obviously showed that he cared for his image-building and the public responses to his policies. In his second term, Donald Tsang did not have to worry about his re-election, and he had ample room to consider serious reforms and the introduction of important policies. Political reforms must be cleared with the central leadership; but the broadening of the tax base and the introduction of a value-added tax, a programme for the provision of long - term finance for medical care, etc. would all make significant contributions to the territory’s development. The Donald Tsang administration, however, has been avoiding controversial issues all the time; its low level of support has probably been an important consideration, and the difficulty of arriving at a consensus in the community undoubtedly has been a serious obstacle.

22. Ibid., 1 March 2010.

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The latter is related to the exacerbation of various types of social cleavages, and they in turn are the result of the failure of the HKSAR government to mobilise the community for the long-term development of the territory. The widening of the gap between the rich and poor has been an increasingly serious structural problem, like that in Mainland China. But there is one big difference between the two — people in the Mainland have enjoyed an impressive improvement in living standards in the past three decades and more, and they have confidence that tomorrow will even be better. In contrast, the majority of Hong Kong people consider that their quality of life has been in decline in the past decade, and they are not optimistic regarding the prospects of an improvement of their living standards in the future. More important still, they do not believe that their government cares about their difficulties and demands. Political reform is a significant bottleneck. The British administration was not an elected government, and its legitimacy was based on its performance.[23] Since Hong Kong’s return to the motherland, the performance of the HKSAR government has been disappointing, and the legitimacy accumulated before 1997 has been much eroded. Donald Tsang is obviously not a charismatic leader. As he is not interested in promoting democratic reforms, and he is not perceived to be performing well, his administration suffers from a legitimacy deficit. The only appeal of his administration is probably the support from the Chinese leadership. Since the design of the policy for securing the return of Hong Kong in the era of Deng Xiaoping, a very important consideration on the part of the Chinese leadership has been the maintenance of investors’ confidence; hence their interests have been well protected.[24] A significant example is the stipulation in the Basic Law that legislators cannot propose an increase in government expenditure, to ensure that the business community’s taxation burden will not be made to rise too readily. As the local major

23. Joseph Y. S. Cheng, “Political Modernisation in Hong Kong”, The Journal of Commonwealth & Comparative Politics, 27(3), November 1989, pp. 294–320. 24. See Lu Ping’s oral account compiled by 錢亦蕉, Lu Ping’s Oral Account on the Return of Hong Kong to China, Hong Kong: Joint Publishing.

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business groups develop and expand their investment in the Mainland, their influence on the Chinese leadership has correspondingly increased. Top business leaders in Hong Kong have more contacts with Chinese leaders than the Chief Executive does; and they are the key group consulted by Beijing regarding the choice of the Chief Executive. In recent years, there is a saying in the Mainland: previously tycoons courted senior officials, now is the other way round. The same applies to Hong Kong. During British colonial rule, top civil servants made policies in a neutral manner without conflicts of interest; and the performance of the civil service government was appreciated by the community. After 1997, in the eyes of Hong Kong people, the HKSAR government increasingly favours the major business groups at their expense. The lower social strata complain that they have not been able to enjoy the fruits of economic development; and the middle-class’s sense of political impotence has grown. The condition of the real estate market is probably most frustrating from the latter’s point of view. Middle-class families often spend their life savings to buy their accommodation, and historically real estate developers have refused to offer the exact measurements of their flats. Various phenomena of “inflated construction areas” have been worsening. When prospective buyers go to see model units, they are often not allowed to take photographs or measurements. This arrogance of real estate tycoons gives rise to resentment against the rich which has become a media discussion topic recently, and this emotion has spread to cover the HKSAR government as well. The “Lehman Brothers mini-bond issue” during the global financial tsunami caused many protests, and the protesters also severely criticised the inadequate supervision on the part of the government. In fact, the government has been catering to the interests of banks and other financial institutions; which have no obligation to inform their clients of the commissions charged by agents in the sales of their insurance and financial products. The supermarket business in the territory is a duopoly, even as Carrefour failed to enter the market despite its success in the Mainland. Various real estate groups favour their respective associated telecommunications firms in their housing projects so that the

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development of a territory-wide telecommunications platform has been handicapped. All these practices not only violate consumers’ interests, they also adversely affect Hong Kong’s long-term development. In his Policy Address in October 2010, Donald Tsang finally indicated that his administration would tackle the issue of “inflated construction areas” by requiring real estate developers to provide exact measurements of their flats. But the HKSAR government then offered a “grace period” and stated that it would seek a consensus with real estate developers. The community was still waiting to see if the Donald Tsang administration was serious in exerting pressure on them.[25] During the tenure of the Tsang administration, there emerged more and more criticisms of collusion between the government and big business. An obvious indicator is the appointments to the government’s advisory committees, for which the responsibility clearly falls on Donald Tsang and his top officials. Following the practice of his predecessor, membership of the government’s advisory committee system is largely limited to between 400 and 600 people, who are mainly key members of the major business groups and their families as well as professionals associated with these business groups. This situation is even less open than that in the 1970s and 1980s when the British administration was eager to involve some dissenting voices in the advisory committee system to ensure that a broader spectrum of views was heard and to demonstrate its liberal position. Further, the British administration established a convention that a community leader should not serve on more than six advisory committees nor serve on any committee for more than six years. In recent years this convention has ceased to be observed. Media reports indicate that there are a few “kings of public offices” who serve on dozens of government bodies; and there are members who serve for more than six years in some advisory committees. Moreover, many young members of the second and third generations of prominent business families often receive appointments to important

25. See footnote 9.

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advisory committees. “Senior officials courting tycoons” is perceived as the only explanation. This situation has also discouraged many professionals who are eager to serve the government as a contribution to the community. The legitimacy deficit of the Donald Tsang administration, the community’s perception that it ignores Hong Kong people’s interests, policies favouring major business groups, and the gradual blocking of consultation channels, have all worked to exacerbate social divisions. The administration’s response has been the avoidance of controversial policy issues, reducing itself to a lame - duck government.

5. Political Reforms and the Erosion of the HKSAR’s Autonomy During Donald Tsang’s campaign for re - election as Chief Executive, he told journalists that he would “engage in a tough game” to settle the challenging issue of political reforms. In his first policy address after re - election, he stressed that he had a constitutional duty to resolve the question of political reforms in the territory.[26] In spring 2010, however, both central government officials and the Donald Tsang administration indicated that the latter does not have the authority to tackle the political development of the territory beyond 2012 in their promotion of the latter’s political reform package. This begs the question: When did the Donald Tsang administration lose the authority to handle political reform beyond 2012? When did the central government take back this authority from the HKSAR government? Both the central government and the HKSAR government still owe Hong Kong people an explanation. For Hong Kong people, the general understanding of the Basic Law has been that, for amendments of the method for selecting the Chief

26. See the policy address delivered by Donald Tsang on 10 October 2007 entitled “A New Direction for Hong Kong”; see all major local newspapers of the following day for commentaries.

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Executive for terms subsequent to the year 2007, the endorsement of a two-thirds majority of the full Legislative Council, the consent of the Chief Executive, and the approval of the NPCSC have to be secured. Similarly, amendments to the method for forming the Legislative Council can be made only if the endorsement of a two-thirds majority of the full Legislative Council and the consent of the Chief Executive are secured; and it has to be reported to the SC of the NPC for record. There are no stipulations in the Basic Law that the HKSAR government must first seek the authorisation of the NPCSC before it can deal with the roadmap and the timetable of the political reforms beyond its present term. During the drafting of the Basic Law, Hong Kong people were not aware that there had been such discussions on the prerequisite of NPCSC authorisation. Nonetheless, it is apparent that when the next HKSAR government intends to approach the abolition of function constituencies in the Legislative Council by 2020, it has to seek the NPCSC’s authorisation first. When the Tsang administration announced its political reform package, Maria Tam Wai-chu, a Hong Kong member of the Committee for the Basic Law of the HKSAR under the NPCSC, revealed in a Radio Television Hong Kong (RTHK) television talk-show that “universal and equal representation” applied to the electoral right of Hong Kong people and it would be defined by the central authorities in Beijing, and not be based on any international human rights document. When did the central authorities arrive at this important decision? Had the HKSAR government been consulted on this? If so, why didn’t the Tsang administration consult the Hong Kong community, or at least inform it of the “new policy”? It is certainly inappropriate for such a significant decision to be revealed to the Hong Kong people in a television talk-show. There was gossip within local media circles in May-June 2010 that some pro-Beijing legal experts in Hong Kong were working to produce a definition of “universal and equal representation” applicable to the territory’s future political reform packages. Has the Donald Tsang administration been involved in this work? Certainly the incumbent HKSAR government has to be accountable to the Hong Kong public regarding Maria Tam’s revelation. Further, it is obliged to ensure that Hong

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

Kong people will be involved and consulted in this process. Regrettably we have not heard anything from the Tsang administration so far in this regard. On 24 May 2010, after meeting the Democratic Party (DP) delegation on the political reform issue, Li Gang, Deputy Director of the Central Liaison Office in Hong Kong, was at pains to attempting to explain to the media that his office was not a “second governing team” in the territory. This was actually the first local press conference on the part of the leadership of the Central Liaison Office, and the “second governing team” was an important issue to be clarified. Why should Li Gang consider this something to be clarified in this first press conference, as no reporter raised this issue? Certainly he realised that many Hong Kong people had this perception; and it was much more than an idea floated in an article by his former colleague Cao Er-bao published in Study Times, the official journal of the Central Party School in Beijing.[27] When the central government authorised the Central Liaison Office to meet some pro-democracy groups in Hong Kong, it should have carefully considered whether the latter should assume the role of receiving messages from the entire Hong Kong community and serving as a bridge between Beijing and Hong Kong on the issue of political reforms. If this is the case, then it must observe the principles of openness and high transparency. If the Central Liaison Office has indeed assumed this role, then the Chinese leadership must consider the impact on the HKSAR government and the HKSAR’s autonomy. The Donald Tsang administration obviously has neglected its duty to safeguard the HKSAR’s hitherto high degree of autonomy. In recent years, more and more protest rallies related to political reforms have chosen to approach the Central Liaison Office; this phenomenon is a good reflection that Hong Kong people realise that the Donald Tsang administration has no role in this regard. In June 2010, when the Democratic Party released its political reform proposals, officials of the central government and Central Liaison Office,

27 See all major Hong Kong newspapers on 25 May 2010. See also 曹二寶, “Hong Kong’s Governing Force under the Conditions of ‘One Country, Two Systems’”, (Study Times, a publication of the Central Party School).

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Rita Fan, Hong Kong deputy of the NPCSC, and Elsie Leung, deputy chairman of the Committee for the Basic Law of the HKSAR under the NPCSC, all went public to declare that the proposals contravened the related decisions of the NPCSC. But in less than a week’s time, they all reversed their position ­— not only were the proposals said to be in line with the related decisions of the NPCSC, they also highly praised the proposals. According to the Constitution of the People’s Republic of China, the NPCSC has the authority to interpret the Constitution, like the Supreme Court of the United States and the Constitutional Courts of some European countries. The reversal of their previous positions on the part of the Chinese officials, Rita Fan and Elsie Leung on their assessment of the Democratic Party’s political reform proposals seriously discredited the solemnity of the NPCSC’s decisions. The perception of the Hong Kong community was that as long as the central leadership had made the decision, the Chinese officials concerned would follow it to interpret the NPCSC’s related decisions. Hence it could only see the will of the leadership, and it failed to see a defence of the rule of law. On 21 June 2010, the people of Hong Kong came to know that the Chinese authorities had endorsed the Democratic Party’s political reform proposals; and on 23 June 2010 the Legislative Council had to vote on the revised political reform bill. There were significant differences between the original version of the HKSAR government’s reform proposals and the revised version incorporating the amendments suggested by the Democratic Party. Regarding the former, there was a formal consultative document to facilitate discussions in the community; regarding the latter, Hong Kong people only had a rough idea through media reports. The community was certainly confused by the conflicting statements made by the Chinese officials, Rita Fan and Elsie Leung on the proposals of the Democratic Party. Through the intervention of the central government which succeeded in securing the support of the Democratic Party and the Hong Kong Association for Democracy and People’s Livelihood, the Donald Tsang administration had enough votes in the Legislative Council to overrule

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proposals to delay voting on the political reform bill and to pass the revised political reform bill. But due process requires adequate time for Hong Kong people to deliberate on a very significant political issue. Though the Donald Tsang administration had to give way to the central government in the handling of political reforms, and it had no political will to defend the high degree of autonomy of the HKSAR, at least it should have the decency to respect due process in the passage of the political reform bill.

6. Differential Treatments and the Recruitment of Talents The British administration was a civil-service government. During the first term of the C. H. Tung administration, Tung did not get along well with his Chief Secretary for Administration, Anson Chan; and he had difficulty effectively exercising his command over the civil servants. In his second term beginning in 2002, Tung introduced the Principal Officials Accountability System (POAS), with the objective of forming his own political team. Donald Tsang went a step further to expand the political appointments to include a batch of deputy secretaries and political assistants. This has generated new assets to reward the Chief Executive’s supporters, thus facilitating the attraction of the community’s elites to support the government. Theoretically, the POAS serves to recruit talents from the business community, the professions, academia, etc., to help remedy the inadequacies of the existing civil service; more important still, it enables the civil service to maintain its political neutrality. Regarding the former, apparently the C. H. Tung administration had failed to attract any heavyweights from the business community to join the government; and the situation continued to deteriorate during the Donald Tsang administration whose policy secretaries almost all came from the civil service. Under such circumstances, Hong Kong people naturally raised the question: If the political team was roughly the same batch of top civil servants, what was the point of introducing the POAS?

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Difficulty in external recruitment is partly related to the absence of the American political culture where highly successful business leaders feel an obligation to accept public service with the associated political risks and sacrifices in income. Most local business leaders are not too concerned with the question of financial remuneration. They have been discouraged mainly because they do not find the idea or opportunity attractive as they consider that as policy secretaries they may not be able to achieve much while attracting a lot of criticism. The appointments of deputy secretaries and political assistants on the part of Donald Tsang were quite controversial on issues such as their nationalities, the confidentiality of their salaries, etc. These issues demonstrated a lack of careful consideration by the Donald Tsang administration; moreover, Hong Kong people did not seem to have a high evaluation of the appointees. After some years of service, they still do not seem to have won the community’s support. The Commission on Strategic Development deserves some attention. It was established by C. H. Tung in 1998; and at the beginning of the Donald Tsang administration it was considered the most important advisory body. In October 2005, in his first formal policy address, Donald Tsang declared that he would substantially expand its membership by inviting talents from different fields so that it may serve as a platform for all sectors of the community to explore with the government major issues pertaining to Hong Kong’s long-term development, especially at the early stage of policy formulation. Four committees were then set up within the commission; and the commission and its four committees were served by a secretariat established within the Central Policy Unit, which provided both secretarial and research support. Despite the apparent priority accorded to the commission, today Hong Kong people hardly feel its impact.[28] In a democratic, pluralistic polity, the civil service has to maintain its neutrality, treating all political parties in the same manner. Since the introduction of the POAS, the defence of government policies should

28. Latter, op. cit., pp. 115–119.

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no longer be the civil service’s responsibility. But Donald Tsang stated that “there is a difference between those who are close to and those who are distant from the government”; and during his administration, in the District Councils and in many other areas, activists in the pro-democracy movement obviously did not feel that they had been given equal treatment by the civil service. In fact, not a few responsible persons of social service voluntary bodies and members of official advisory committees who had no political party affiliations consider that they were cold - shouldered by senior civil servants after openly articulating criticisms of the government. These practices may create some deterrence effect against critics; but in the long term, Hong Kong people become more alienated from the government. On the other hand, the civil service’s low morale has been an open secret; the community’s dissatisfaction with the Donald Tsang administration has naturally affected its enthusiasm. Most political appointees under the POAS have failed to win respect and support. Many civil servants lament the fact that their superiors spend most of their time responding to media criticisms to the extent that they cannot concentrate on their work. The low morale of the civil service in turn adversely affects the performance of the government, thus attracting more criticism, and completes the vicious circle.

7. Conclusion The economy of Hong Kong fortunately can still maintain stable growth. As its dependence on the Mainland economy increases and the latter achieves impressive growth, it naturally benefits Hong Kong, which is already a mature economic entity, and the community understands that it cannot expect very high growth rates. Middle-class households also realise that they enjoy probably the highest living standards in Asia. In a society where the rule of law is respected, and law and order well maintained, Hong Kong people feel secure. Despite the gradual decline of the territory’s international competitiveness, the community is still proud of its achievements. All these are the foundation of Hong Kong’s good governance. Though the Donald Tsang administration’s performance is lacklustre, the government machinery on the whole runs effectively.

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29

Dissatisfaction is accumulating in Hong Kong society, but most people’s response has been a sense of helplessness, not anger. Radical political actions symbolised by the protests of the League of Social Democrats, though far from radical by western European standards, can only attract the support of a minority, normally estimated to be around 10% of the public. Most Hong Kong people resent its protest activities. Their value orientations tend to be conservative, and they favour the maintenance of the status quo. They selectively support gradual reforms, and are worried that radical political campaigns may de-stabilise the society. The most popular political leaders attract the public’s support by moderate images, and are perceived to have been articulating the voices of the silent majority. They are definitely not revolutionary leaders.[29] In the eyes of Hong Kong people, the widening of the gap between the rich and poor, the reduction in opportunities for upward social mobility and the decline in the territory’s international competitiveness are broad trends; and they only hope that through hard work they can be exceptions to the trends. Fortunately, a vast majority of Hong Kong people still believe that their efforts will be rewarded. In this context, the avoidance of controversial issues on the part of the Donald Tsang administration may not have been unwise, at least it can avoid confrontations and maintain stability. A sense of helplessness usually does not lead to political confrontations. Most Hong Kong people see democracy as an ideal; but since the Chinese leadership is against it, the most they can do is to take part in protest rallies. They desire a better social security system too, but few would accept the Singaporean model of contributing a substantial portion of their incomes for a satisfactory pension scheme and a medical insurance programme. Perhaps among all people, C. H. Tung should be the most grateful to Donald Tsang. Comparing two Chief Executives who have not done much for them in terms of economic development, social services and political

29. Joseph Y. S. Cheng, “Hong Kong Since Its Return to China: A Lost Decade?”, in his edited volume, The Hong Kong Special Administrative Region in Its First Decade, Hong Kong: City University of Hong Kong Press, 2007, pp. 35–47.

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reforms, Hong Kong people definitely favour an honest old man with his heart in the right place than an arrogant leader who has little sympathy for the grassroots.

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C h a pt er 2 Expanding and Destroying the Accountability System Joseph W.  P.   WONG Visiting Professor, Department of Public and Social Administration City University of Hong Kong

1. The Original Accountability System When Chief Executive C. H. Tung delivered his last policy address during his first five-year term of office in October 2001, he knew that he would continue in his post for another five years. As it turned out, he was nominated by 762 members of the 800 strong Election Committee and elected unopposed in March 2002. Chief Executive Tung thus made his final first-term Policy Address almost as his inaugural speech when he announced the outline of an Accountability System with the following objectives: “To strengthen the accountability of principal officials in their respective policy areas; ensure the Government can better respond to the demands of the community; make sure that policies are well co-ordinated; strengthen the co-operation between the Executive and the Legislature; ensure effective implementation of policies; and provide quality services to the public”.[1]

1. C. H. Tung, Building on Our Strength, Investing in Our Future. Address at the Legislative Council meeting (Hong Kong: Printer Department, 10 October 10 2001 ) para 131.

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These objectives remained unchanged from the implementation of the Accountability System in July 2002, and when Tung’s successor Donald Tsang expanded the System in 2007. But how the Accountability system under Donald Tsang’s administration has impacted on his governance and the lessons one could draw from it deserve a more detailed and critical examination.

2. Righting the “Wrongs” of the Tung System Reportedly described by Hong Kong’s last Governor as a “consummate civil servant”, Donald Tsang, unlike Anson Chan, had no aspiration at the time to become the Chief Executive of the Hong Kong Special Administrative Region (HKSAR). He was the Financial Secretary at the time of the handover, and displayed the same loyalty to his new superior by addressing Mr. Tung as “boss” (老闆). He succeeded Anson Chan as Chief Secretary for Administration when the latter resigned in January 2001 in protest against Tung’s decision to introduce the Accountability System. (The impact of the system on the Chief Secretary for Administration and the Financial Secretary will be elaborated below). Under Tung’s system, all the principal officials would report to him, thus eliminating the previous system inherited from the Colonial Civil Service whereby the Directors of Bureau reported to either the Chief Secretary for Administration or the Financial Secretary, with the latter two principal officials clearly supervising the work of the former officials. Tung relegated these two senior Secretaries to the position of co-ordinators in respect of cross-bureau policy issues. Unlike the Financial Secretary who still has the important task of preparing and presenting the annual budget, the Chief Secretary for Administration does not have a specific policy portfolio which cannot be covered by a Director of Bureau. Anson Chan, who used to be the de facto number two in the administration, regarded this proposal as a blunt act to remove her power and status, and no doubt it strengthened her resolve to leave the government. Donald Tsang found himself in this awkward position when the Accountability System was introduced in July 2002. His major task as the new Chief Secretary for Administration was to implement an order from Tung to launch a “Team

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Clean Campaign” to clean up Hong Kong in May 2003, after the outbreak of the Severe Acute Respiratory Syndrome (SARS) a few months earlier. As a skilful administrator, Donald Tsang persuaded Tung to allow him to chair a Policy Committee. It acted as a clearing house for all proposals put forward by Directors of Bureau before they were submitted to the Executive Council for consideration and approval. In this way, he managed to retain a certain status and influence over his principal official colleagues. But this did not prevent the Chief Executive from discussing ideas with and conveying his wishes to the Directors of Bureaus directly. There is always a silver lining. Because he was generally perceived as being sidelined by Tung, Donald Tsang was regarded by the people of Hong Kong as a respected and efficient civil servant. He was also untainted by the major policy blunders, such as the proposed legislation of Article 23, of the Tung administration. So when Donald Tsang ran in the Chief Executive election in 2007 for the third five-year term with the slogan “I‘ll get the job done” he had a lot of sympathy from the vast majority of common people who were not eligible to vote in the Election Committee. They believed that Tsang had not been given a proper job to do as Chief Secretary for Administration in the first five-year term, and did not have enough time as Chief Executive to do a good job during the remaining 20 months of the second term. Donald Tsang did not wait until 2007 to revive the century old three tier hierarchy of the Hong Kong administration, however. In his first Policy Address as Chief Executive in 2005, he announced that all Directors of Bureau would henceforth report to the Chief Secretary for Administration or the Financial Secretary for their day-to-day operations.[2] While all the Directors of Bureau remained as members of the Executive Council, they only had the right to attend meetings only when items on the agenda concerned their portfolios. But the three top principal officials, i.e., the Chief Secretary for Administration, Financial Secretary and Secretary

2. Donald Tsang, Strong Governance For the People. Address at the Legislative Council meeting (Hong Kong: Printer Department, 19 October 2005 ) paragraph 9.

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for Justice, attend all Executive Council meetings.[3] The effect of this decision, which was based a proposal made by myself as Secretary for the Civil Service, was to enable the appointment of more non-official members to the Executive Council, and to save the face of the Directors of Bureau who would in fact become attendees at Executive Council meetings.

3. Renaming and Expanding the Accountability System As a civil servant, Donald Tsang did not favour the introduction of the Accountability System. As a principal official whose power was stripped away, his commitment to the system could not be more than his own share of responsibility as Chief Secretary for Administration, which was not a lot anyway. But having been elevated to the position of Chief Executive through a combination of personal luck and fortuitous circumstances, Donald Tsang saw the Accountability System in a different light. Rather than undo the system as some administrative officers privately hoped, he decided to make better use of it for his own purposes as well as to deliver his promise of “excellent governance”.[4] In July 2006, the government published a consultation document to solicit public views on how best to further develop the Political Appointment System (a new term for the Accountability System). Specifically, the government proposed to create two additional layers of political appointment positions, namely Deputy Directors of Bureau and Assistants to Directors of Bureau. It was fair to say that while there were diverse views on the Accountability System, the Tsang Administration was enjoying the feel-good factor of the post-Tung era, and the general public was relaxed about the expansion proposals.[5]

3. Donald Tsang, Strong Governance For the People. Address at the Legislative Council meeting (Hong Kong: Printer Department, October 19, 2005 ) paragraph 16. 4. Ibid., paragraph 1. 5. Constitutional and Mainland Affairs Bureau, Report on the Further Development of the Political Appointment System, October 2007.

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Under the heading “Pursuing Excellence in Governance” in his 2007 Policy Address, Donald Tsang laid down three objectives in expanding the Accountability System, namely: to provide the team of principal officials with stronger support in carrying out political work; to groom political leaders for the government by offering them public administration experience; and to lead a permanent and politically neutral civil service.[6] Specifically, the main role and responsibilities of the Deputy Directors of Bureau, or Under Secretaries are: 1. set policy objectives and priorities; 2. formulate policy and legislative initiatives; 3. map out overall strategies to secure public support for these initiatives; 4. handle Legislative Council business and strengthen the working relationship with Legislative Council; and 5. attend public forums and other functions to explain and defend government proposals and decisions. The Political Assistants work to the Undersecretaries, provide political advice and undertake political liaison duties. With the addition of two political layers comprising 24 posts, Donald Tsang, with a high popularity rating at the time,[7] hoped to use the enhanced capacity to reach out to the community and secure their support for any new government initiatives. His game plan was that, armed with this new people-power, his administration would be able to override any objection from a Legislative Council that does not have a government party, nor one member who owes his allegiance to the Chief Executive. The term “Political Appointment System” may be a better description of what is in essence a fixed-term ministerial system, as distinct from the permanent civil service whose civil servants can also be held accountable

6. Donald Tsang, A New Direction For Hong Kong. Address at the Legislative Council meeting (Hong Kong: Printer Department, 10 October 2007 ) paragraph 103. 7. 65.4 support rating (0–100) according to the Public Opinion Programme of The University of Hong Kong (HKU POP) poll in October 2007, for further details see check http://hkupop.hku.hk.

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for their decisions and actions. The Donald Tsang administration would soon find that the people of Hong Kong regarded the words “accountability” and “political appointment” as synonymous.

4. The Foreign Passport Saga In May 2008, Donald Tsang announced the appointment of the first batch of eight Under Secretaries. Within a few days, the media discovered that five of them possessed foreign passports. For almost a month, the government defended their right of foreign abode on the ground that unlike the principal officials, the Basic Law does not require Under Secretaries to give up such right. But Donald Tsang and his team missed the point, it was not a legal issue; rather it was a question of loyalty. Hong Kong people do not mind if their neighbours or themselves keep a safety permit just in case “the onecountry-two-systems” does not work out, but they do not like the idea that the future leaders of the HKSAR have less than 100% commitment to this place. One may call this a double standard, but it was certainly the first time Donald Tsang misjudged public sentiment. In the end, all the five Under Secretaries gave up their foreign passports.

5. Overpaying Under-qualified Political Talents The pay package of the Under Secretaries and Political Assistants, at 65– 75%, and 35–55% respectively of that of a Director of Bureau, had been proposed by the government and approved by the Finance Committee of the Legislative Council in 2007 without causing any controversy or even interest at the time. But when the government announced the first batch of eight Under Secretaries and nine Political Assistants, for whom there was not even a brief meet-the-media session, the general public was hardly impressed by the fact that the vast majority of the appointees lacked political experience or professional knowledge in their respective portfolios. For example, Yau Shing-mu, the Under Secretary for Transport and Housing, had no previous experience in transport and housing

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matters, and Kenneth Chen Wei-on, the Under Secretary for Education, could hardly claim any professional knowledge, let alone experience in education. This mismatch between qualification and position raised the question whether taxpayers were getting their money’s worth. Still sulking over the passport issue, the government refused to disclose the exact salaries paid to these appointees, this time claiming protection of privacy. But the media and the general public refused to budge. Once again, the government backed down and the disclosure told a rags-to-riches story: one Political Assistant, Paul Chan Chi-yuan, who used to earn less than HK$30,000 a month as a research assistant in a university, would receive HK$134,000 a month for his public service position. The government argued that the appointees were paid according to the approved scales, but it only reinforced the public’s impression that the decision on the appointment and remuneration of the successful candidates was arbitrary, unlike the rigorous and transparent system in the civil service. Comparison of between the new group of political appointees with their civil service counterparts such as Permanent Secretaries and Administrative Officers in terms of ability and relevant experience continued to cast a long shadow over the expanded Accountability System.

6. The Beginning of the End for Donald Tsang Unlike the Tung system, which allowed Directors of Bureau to choose their administrative assistants, Donald Tsang insisted that he was the sole authority to appoint all Under Secretaries and Political Assistants. This was a deliberate act to ensure absolute loyalty, perhaps a reaction against years of insecurity during the Tung administration. But the consequence was that he could not dissociate himself from the widespread criticism levelled against the expanded Accountancy System. This marked the beginning of his fall from grace. For example, his support rating dropped significantly over three months, from 65 in May 2008 to 55 in August 2008, according to the HKU POP poll (refer to footnote 7). Donald Tsang apologised for not arranging a media session for the new appointees at the time of their appointment, and for nothing else.

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He defended the expansion of the Accountability System at a Legislative Council meeting on the ground that time would tell whether these new officers would do a good job. He also said that as the performance of these political officers would be subject to scrutiny by the media and the general public, those who failed to meet the high standards expected of their jobs would leave the service. This assurance turned out to be a broken promise.

7. The Leung Chin-man Case In August 2008, New World China Land Limited, a subsidiary company of a large property developer in Hong Kong, announced the appointment of Leung Chin-man, a retired senior civil servant, as an executive director and deputy managing director of the company. The announcement aroused public controversy as Mr. Leung was the former Permanent Secretary for Housing, Planning and Lands (Housing) and Director of Housing prior to his retirement from the government in January 2007. During his government service, he was involved in the disposal of flats in a Hunghom Peninsula development to the developer at a land premium considered by the public at the time to be too low. The media was concerned that the appointment smacked of being a deferred reward for favours given to the developer by Leung, and the public questioned the propriety of government, in particular the Secretary for the Civil Service, Miss Denise Yue, for approving Leung’s application for the position. Although Denise Yue tried to fend off the criticism by arguing that her approval followed the normal post-retirement employment policy and vetting procedures, Donald Tsang displayed his political shrewdness by calling for a report from the Civil Service bureau as a matter of urgency. On receiving the report, he decided that the Secretary for the Civil Service should reconsider Mr. Leung’s application for post-service employment with due regard to his involvement in the Hunghom Peninsula development.  Thereafter, she would need to present another report to him. A month later, Donald Tsang appointed an independent Committee on Review of Post-service Outside Work for Directorate Civil Servants, chaired by Ronald Arculli, a member of the Executive Council, to review the existing policy and arrangements.

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Although Leung and his prospective employer agreed to terminate the employment, the fired-up Legislative Council would not let the matter rest. In December 2008, it passed a resolution to appoint a select committee to inquire into the post-service work of Leung Chin-man and related matters. In its report published in December 2010, the Select Committee considered that “Miss Yue, being a Principal Official under the Accountability System, had not demonstrated political sensitivity in handling Mr. Leung’s application”. The report went on: “She had failed to grasp public sentiments and understand public expectations and concerns. She had committed a grave error of judgment and had not discharged her role as the final gatekeeper of the Control Regime”. “Miss Yue had neither given precedence to the protection of the public interest nor upheld the approval criteria of the Control Regime, resulting in the Government’s credibility being damaged,” the report concluded. The severe criticism from the Select Committee resulted in another public apology from Denise Yue, the first one had been made when she received the order from the Chief Executive to reconsider the case. Following strong criticism that saying sorry is not an inadequate remedy for such a grave mistake, Donald Tsang told the media that he had already “instructed” Yue to be more thorough, careful and prudent in handling similar applications in future.[8] (Chinese press release from CE’s Office 9 December 2010) He also said that the government would study and consider the recommendations of the report of the Select Committee and the report of the independent Review Committee submitted in July 2009) ,[9] with a view to improving the existing regime as soon as possible. In fact, the government took no action for more than a year on the 23 recommendations contained in the report of the Review Committee, when 19 of the recommendations were supported by the Review Committee unanimously and the remaining four by a majority of members, all aimed to improve the arrangements governing different aspects of the control

8. www.info.gov.hk/gia/general/201012/09/P201012090172.htm 9. Report submitted by the Committee on Review of the Post-service Outside Work for Directorate Civil Servants on 10 July 2009, for further details see www.dcspostservice-review.org.hk/english/index. html

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regime on post-service employment of senior civil servants. No doubt some of the recommendations, such as extending the control period of retired civil servants, are not welcomed by the civil service. But if it was the government’s intention to stall taking action on this difficult subject before the expiry of its term of office in June 2012, Mr. Leung did not help when he joined a company owned by the controlling shareholder of New World in April 2011. So Miss Yue finally undertook to complete the government’s internal consultations and deliberations. In July 2011, three years after the Leung Chin-man case first started, the government announced its acceptance of most of the proposals contained in the two reports, except the most important one relating to the extension of the control period.

8. Mid-term Review of the Performance of New Political Appointees After the appointment of the Under Secretaries and Political Assistants in May 2008, HKU POP conducted three-monthly surveys to gauge people’s familiarity with these officials, as a test of their popularity.[10] In the last survey conducted in January 2010, seven out of the nine Under Secretaries had above-zero recognition rates, six out of the nine Political Assistants had zero recognition, while no official had a recognition rate as great as 2%. All three figures were worse than three months previously. Since all the seven surveys spanning over 18 months had consistently shown that people knew practically nothing about these Under Secretaries and Political Assistants, and the situation seemed to be getting worse, HKU POP decided to stop conducting such surveys in order to deploy resources to “other more meaningful surveys”. The government held a different view of the performance of these political officials. In August 2010, it announced the outcome of the mid-

10. Surveys of the Popularity of Under Secretaries and Political Assistants conducted by the Hong Kong University Public Opinion Programme in 2008–10.

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term review of the remuneration of Under Secretaries and Political Assistants, an exercise it had undertaken to do when the proposal for remunerating the new political appointees was approved by the Finance Committee of the Legislative Council in 2007. The review was conducted by government between May and July 2010. The performance of each Under Secretary and Political Assistant was appraised by his or her supervising principal officials and the appraisal reports were individually reviewed by the Director of the Chief Executive’s Office. The performance of the Under Secretaries was assessed mainly on their effectiveness in promoting government policies and presenting government positions in the Legislative Council and to the media, community organisations and members of the public, and in assisting their supervising Bureau Secretaries in formulating and implementing policies. The performance of the Political Assistants was assessed mainly on their effectiveness in tendering political analyses and advice to their supervising principal officials, as well as in political liaison work. On the basis of these appraisal and review reports, the Appointment Committee chaired by the Chief Executive personally “considered that the performance of each of the Under Secretaries and Political Assistants generally met the requirements, and on that basis decided that their remuneration should remain unchanged”.[11] The conclusion that these officials performed well was inconsistent with the decision that their remuneration should remain unchanged. Such a decision would only make sense on the grounds that these officials were already overpaid, and to further increase their salaries would cause another round of public controversy. Defending the outcome of the review, Donald Tsang said that the government needed time to consolidate the new system, “Since the creation of these positions, the government’s work in explaining policies

11. Constitutional and Mainland Affairs Bureau, Transcript of Media Session on Mid-term Review of Remuneration for Under Secretaries & Political Assistants on 13 August 2010.

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to the Legislative Council and the District Councils has been enhanced”,[12] he said. This statement did not match with the opinion of the Legislative Councillors who did not find most of these new appointees helpful or visible.

9. The Godfrey Row One of the main objectives of the Accountability System is to preserve the political neutrality of the civil service. This was included in a civil service circular at the time. When the system was expanded in 2007, the government stressed that with the addition of two layers of political officers, senior civil servants would be relieved of politically related duties such as lobbying members of the Legislative Council. In this way, the political neutrality of the civil service would be strengthened. At the time when C. H. Tung, who was a businessman before he became Chief Executive, introduced the Accountability System in 2002, I was the Secretary for the Civil Service. A civil service circular setting out clearly the working relationship between the accountable officials and the civil service, and the political neutrality of the civil service, was issued before the appointment of the first batch of political principal officials. Donald Tsang, who had more than 30 years of experience as a civil servant, promised to publish a more formal Civil Service Code to ensure that the expanded Accountability System would strengthen rather than undermine the professionalism and political neutrality of the civil service. Denise Yue completed the task in November 2009, almost two years after the implementation of the new System, and issued a Civil Service Code which actually downgraded the role of the Secretary for the Civil Service in protecting civil servants against political interference from the top layer of government. For example, under the old system, the Secretary for the Civil Service, as a guardian of civil service values, could handle complaints of political interference relating to all politically appointed principal

12. Donald Tsang, Sharing Prosperity for a Caring Society. Address at the Legislative Council meeting (Hong Kong: Printer Department, October 13, 2010 ) paragraph 155.

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officials, including the Chief Secretary for Administration and the Financial Secretary. If the complaint could not be resolved satisfactorily, the Secretary for the Civil Service could bring the matter to the personal attention of the Chief Executive. Under the Civil Service Code, if a complaint relates to a Director of Bureau, the Secretary for the Civil Service has to put the matter to either the Secretary for Administration or the Financial Secretary, both being political officials, albeit at a higher level, for resolution. Only when the complaint remained unresolved could the Secretary for the Civil Service bring the matter to the attention of the Chief Executive. The following case, involving a complaint against the Financial Secretary, exposed the increasing vulnerability of senior civil servants against possible attempts from their political masters to influence an otherwise proper and neutral decision-making process. In May 2010, former Chief Government Information Officer Jeremy Godfrey, who had resigned from government four months previously, submitted a thirteen-page document to the Legislative Council alleging political pressure from his senior officers to award a HK$220 million contract to a company known as Internet Professional Association (iProA) to run an Internet access programme to facilitate the learning of underprivileged children. The Information Technology and Broadcasting Panel of the Legislative Council conducted two meetings to hear evidence from Godfrey and related government officials. The permanent Secretary for Commerce and Economic Development, Elizabeth Tse Man-yee, flatly refuted Godfrey’s allegation that she had suggested to him that it was a “political assignment” to choose iProA. (IProA is associated with the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), the largest pro-China party in Hong Kong, although Godfrey did not make any allegation against DAB.) At the Panel meeting, the Financial Secretary, John Tsang Chun-wah, admitted that he had mentioned iProA as a suitable organisation possessing the business experience and the expertise to run the programme, before the selection process started. The deputy to Godfrey at the time, Bassanio So Chek-leung, told the Panel that after the government had received several proposals from various organisations and before the selection process was concluded, Frankie Yip Kan-chuen, the Political Assistant to John Tsang, asked him about the likelihood of iProA being awarded the contract. In the

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end, iProA shared the contract with the Council of Social Service, which got the highest score in the selection process, with each of them running the programme in separate districts, an arrangement opposed by Godfrey. The pan democratic members of the Legislative Council made an attempt to launch a formal inquiry into the Godfrey case, similar to the one over Leung Chin-man, but this was blocked by the pro-establishment members including the DAB. On 8 June 2010, in reply to a question on the Godfrey case, Gregory So Kam-leung, Under Secretary acting as the Secretary for Commerce and Economic Development at the time, categorically stated that the government “will not undertake any investigation on the basis of an unfounded allegation”. The allegation was not unfounded. For example, it was imprudent, to say the least, for the Financial Secretary to mention iProA as a suitable candidate before the start of the selection process, and it was improper for his assistant to enquire about the chances of iProA getting the contract before the conclusion of the selection process. What is most intriguing is that the Secretary for the Civil Service kept herself totally out of sight during the Godfrey row and apparently was content to let an Under Secretary reach the conclusion that no investigation was necessary, and say so on behalf of the government in the Legislative Council. Donald Tsang’s pledge that the expanded Accountability System would better preserve the political neutrality of the civil service was firstly watered down in the fine print of the Civil Service Code, and then badly shaken by the Godfrey allegations. The Secretary for the Civil Service was reduced, voluntarily or otherwise, to be no more than a senior civil servant taking orders from the new political masters under the expanded system.

10. A Super Civil Service in Practice? When C. H. Tung became Chief Executive in 1997, he inherited a team of civil servant principal officials whom he could not replace easily without upsetting the civil service. It was easy to bring in Elsie Leung-Oi-sie as Secretary for Justice as a replacement for the Attorney General, who is

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a British national and, unlike other Secretaries and Directors of Bureau, could not straddle the handover. But Tung had to wait for more than three years to appoint another outsider, Antony Leung Kam-chung, as Financial Secretary when Anson Chan resigned in 2001. In putting forward the Accountability System, C. H. Tung made it clear that he would bring in talents from outside the civil service to enhance the capacity of governance and to form a more dedicated team to deliver his policy initiatives. Thus half the principal officials he appointed under the Accountability System came from outside, namely Elsie Leung-Oi-sie, Henry Tang Ying-yen, Frederick Ma Si-hang, E. K. Yeoh, Arthur Li Kwok-cheung and Sarah Liao Sau-tung. Without the baggage of being a permanent, i.e., non-dismissible, civil servant, these seven outsider-turned-politicians had given up their respective careers, some of which, like the case of Anthony Leung and Fred Ma, attracted much higher monetary rewards than their government package. They were ready from day one of their public service to accept the principle of accountability seriously and step down if necessary as an ultimate honourable act. Within a few weeks of his appointment, Fred Ma, Secretary for Financial Services, apologised for the penny stock fiasco. Antony Leung tendered his resignation when the media found out that he had purchased a new car before he announced an increase in first registration tax in his 2003 Budget. While C. H. Tung chose to reprimand Antony Leung rather than to accept his resignation, the latter eventually resigned later in the year on the grounds that he had completed most of what he had set out to do in his Budget. But it was obvious to all that his reputation had been permanently tarnished by the car-purchase scandal and his resignation was really a matter of time. A year later, E. K. Yeoh, Secretary for Health, Welfare and Food, resigned to take responsibility for his role in tackling the deadly epidemic SARS, which drew severe criticism from the public. A civil servant turned accountable Secretary for Security, Regina Ip Lau suk-yee, resigned a few months after half a million people marched to the streets on 1 July 2003 to protest against the proposed legislation of Article 23. When Donald Tsang started his second term in July 2007, he decided to reshuffle his cabinet and replaced two of Tung’s principal officials, namely Arthur Li and Sarah Liao, with ex civil servants who, like him,

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came from the Administrative Officers Grade. With the addition of one Director of Bureau post, the 15 principal officials were made up of five outsiders, four from the previous administration and only one new appointment in Chan Ka-keung, a university professor with no practical experience, as Secretary for Financial Services and the Treasury. This significant reduction in the proportion of outside talents making up the top political layer of the administration runs contrary to the objective of expanding the Accountability System. The predominantly civil service background of principal officials has led to two unintended consequences, both detrimental to the original objective of introducing the Accountability System in the first place. First, given the reduced contribution of outsiders to the policy making process, the governing team, led by a former career civil servant, has the tendency of reverting to the old civil service mentality of avoiding taking political risks and not making changes unless they become absolutely necessary. A classic example is the government’s approach to rising property prices. For a long time, the government simply refused to do anything to address the problem, for fear that it might bring the market down, as the Tung Administration did with the “85,000 units” policy in 1997. Secondly, the civil service mentality is incompatible with the notion of personal accountability. While civil servants are accountable for their decisions and actions, they can only be held to account after a full and lengthy disciplinary proceeding. Dismissal may occur in the most severe cases, such as conviction on corruption charges. Civil servants rarely resign as a matter of honour to accept their personal responsibility in cases of poor implementation of policies or personal misbehaviour. They would argue, with some justification, that they are not responsible for drawing up the policies in the first place, that any breach of rules or ethics would have to be substantiated in a rigorous investigation process, and that the punishment given ultimately would have to be commensurate with the offence. We can find many examples of this civil service mentality eroding and replacing the spirit of political accountability which was supposed to be an integral part of the Accountability System which it was first introduced in 2002.

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We find the first example in the appointment of the Under Secretaries and Political Assistants. Stephen Lam Sui-lun, Secretary for Constitutional and Mainland Affairs, who was a former Administrative Officer, did not see any need to accept responsibility for the controversy over the appointment, foreign passport and remuneration issues. He did not bother to offer an apology. The Chief Executive did slightly better in expressing regret over the fact that the government had not arranged for the new appointees to meet the media, which was in fact not the main source of public complaint. The worst and probably the last policy blunder Stephen Lam made during his term of office was in respect of the proposal to abolish the byelection mechanism of the election of the Legislative Council relating to the 35 directly elected seats in the geographical constituencies and the five new territory-wide directly elected seats in the District Council constituency. At first, he argued vehemently that adopting the same election list as a replacement mechanism was not acceptable because the votes that went to the successful candidate (who subsequently resigned and resulted in a vacancy) are personal to him or her and therefore should disappear completely after the election. He reversed his position completely before massive protest march on 1 July 2010 and announced an amendment to the proposal using the next in line on the same list as a replacement on the ground that this was consistent with the original wish of the voters. Despite this proposed amendment, Stephen Lam continued to maintain the position that there was no need for the government to conduct a public consultation as it was sure that the original proposal had the support of the public and the subsequent amendment was a further response to public opinion. After the 1 July demonstration which showed a seven-year record turn out (ranging from the police estimate of 50,000 to the organiser’s count of 220,000) during the Tsang administration, Henry Tang Ying-yen, the boss of Stephen Lam, announced that the government would defer putting the proposed legislation to a vote in the Legislative Council and would conduct a two-month public consultation on the whole proposal instead. A consultation paper was issued on 22 July containing four proposals to deal with the “loophole” of filling vacancies due to “reckless” resignations of Legislative Council members, without putting forward the option of maintaining the status quo. Faced with public

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demands for his resignation, Stephen Lam did not admit any responsibility in the government making two U-turns before agreeing to conduct a public consultation. Consistent with his previous position, he did not utter any word of apology. Stephen Lam was not the only principal official under the Tsang administration to act in the traditional civil servant manner by not accepting any personal responsibility over what “the government” did or did not do. The first principal official to use the cliché “collective decision” under the supposedly improved Accountability System is Henry Tang, a first-generation non-civil servant political appointee. In December 2008, he was criticised for the delay in arranging a chartered flight to transport Hong Kong citizens stranded at Bangkok airport. His response was that the decision not to arrange for the chartered flight earlier was a “collective decision” and “the responsibility should fall on the whole government team”.[13] He later offered a public apology and claimed this was a demonstration of the accountability spirit inherent in the political appointment system. Two and half years later, as the Secretary supervising Stephen Lam, his only involvement was to announce a public consultation. Unlike the chartered flight incident, he did not mention any collective decision in the by-election replacement mechanism proposal, did not accept any personal responsibility in the government mishandling the matter, and did not bother to express any word of regret. While Stephen Lam is probably the most intransigent Director of Bureau in refusing to express any regrets over mistakes, big or small, one principal official is at least ready to say sorry to allay public displeasure. York Chow Yat-ngok, Secretary for Food and Health, apologised on many occasions for medical and public hygiene mishaps, many of which happened without his knowledge and others which were beyond his control. While a principal officer could argue that the public may not be always right in criticising a government policy, hence apology should not be made lightly, the same cannot be said of personal conduct well below

13. See the report of a local Chinese newspaper on 3 December 2008, for further details please see http://appledaily.atnext.com/tem ... 731&art_id=11924225.

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the normal public expectation of a high-ranking official. The case of Michael Suen Ming-yeung, Secretary for Education is a glaring one. In May 2011, Michael Suen admitted that in 2006 when he was the Secretary for Housing, Planning and Works, he was notified by the Buildings Department, one of the departments under his charge, that his residence had a number of unauthorised structures with an order that they should be rectified. He did nothing about it and his admission came only after the media had discovered his situation. At first he argued that the Building Department registering the order in the Land Registry, hence restricting his ability to sell the property, was already a punishment. He apologised one day later as a result of intense public outcry. He said he would accept responsibility and rectify the unauthorised structures, which was the extent of his accountability.[14] Following the exposure of the Michael Suen case, the Chief Executive’s Office issued a statement immediately to remind principal officials to check their residences to ensure that there were no unauthorised structures. A few days later, it was the private unit of the Chief Executive which was found to have unauthorised windows in the balcony. At first, Donald Tsang argued that he was not sure that they were illegal. Subsequently, he agreed to rectify the matter based on the advice of the Buildings Department in order to remove any public concern.[15] But it appears that for Donald Tsang, public concern did not warrant any word of regret on his part, or to do so would compromise his “innocence”. What would have been the situation if there were no Accountability System in place and the principal officials had remained as civil servants? Both Henry Tang and Stephen Lam would have found it easier to apologise on behalf of the government, as Anson Chan did in 1998, after the Legislative Council criticised her for inadequate supervision over the opening of the new airport. Michael Suen, ignoring a statutory order from the Buildings Department, could have been subjected to a disciplinary

14. Press Release of Michael M. Y. Suen, Secretary for Education, Transcript of Remarks by SED on 24 and 25 of May 2011. 15. Press Release of Donald Tsang, Statement by Chief Executive on 1 June 2011.

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inquiry on possible misconduct or misbehaviour which brought the civil service into disrepute. In Donald Tsang’s case, to follow the advice of the Buildings Department to remove the structures and not to admit that these structures were unauthorised is drawing a very fine line that is incomprehensible to the public at large. Although the Chief Executive is above the civil service, such behaviour would have brought his moral standing below that of an ordinary well-behaved civil servant. So, in terms of accountability, the expanded Accountability System fared worse than the old civil service system, not to mention the original Accountability System introduced in 2002. While the foregoing consequences of the Accountability System going backwards are producing a negative impact on enhancing the capacity of governance, Donald Tsang either saw it from a different angle or came to accept the reality that he was no longer able to attract capable people from outside the civil service to join his team. The first test came in 2009 when Frederick Ma, Secretary for Commerce and Economic Development, resigned on health grounds. He was succeeded not by someone from the private sector, which should be a logical choice, but by his civil servant Permanent Secretary Rita Lau Ng Wai-lan. And when the latter resigned in April 2011, again on health grounds, there was little support for Gregory So, Under Secretary for Commerce and Economic Development, to step into her shoes, a reflection of the low esteem in the public held the new batch of political officers brought in under the expanded system. It was widely reported that Donald Tsang tried, in vain, to persuade a retired Administrative Officer to take over the vacant post, while there was virtually no report on any likely candidate from the private sector. After more than two months, Gregory So was appointed as Secretary for Commerce and Economic Development. It is difficult to accept that in a commercially thriving centre like Hong Kong there is no suitable person from the private sector to take up this ministerial post. Whether it is the case that Donald Tsang did not actively seek to recruit qualified candidates with relevant commercial experience to succeed Rita Lau, who has none, and had to settle for Gregory So, who has very little practical and impressive outside experience, or it is the case that qualified candidates are simply not interested to join a sinking ship,

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it points to the failure of the expanded Accountability System in bringing outside talents into the administration. The failure to replace Frederick Ma with another private sector candidate and the lacklustre performance of most of the Under Secretaries probably led the Chief Executive to look inwards to fill the remaining vacancies of the Under Secretary posts. In October 2009, Donald Tsang announced the appointment of two new Under Secretaries, Adeline Wong Ching-man, former Administrative Officer, and Lai Tung-kwok, retired Director of Immigration. Adeline Wong would take up the post of Under Secretary for Constitutional and Mainland affairs, left behind by Raymond Tam Chi-yuen, another Former Administrative Officer who moved upwards as Director of the Chief Executive’s Office; and Lai Tungkwok would fill the vacant post of Under Secretary for Security. In a way, these two posts are more suitable for persons with extensive government experience. For example, Lai, with his immigration experience, proved his worth and won praise for the government in his handling of the Manila hostage case in August 2010, when eight Hong Kong citizens were killed by a kidnapper on board a tourist bus in the Philippines.

11. Representing the Central Government or the Hong Kong People? The main purpose of the Accountability System and its subsequent expansion is to ensure that the Chief Executive and his team can better gauge the views and aspirations of the Hong Kong people and reflect them to the central government where necessary. This is in line with Article 34 of the Basic Law which provides that the Chief Executive shall be accountable to the Central Government and the Hong Kong Special Administrative Region. One subject on which the Central Government and the vast majority of the Hong Kong people do not see eye to eye is the violent suppression of protesters on 4 June 1989. On 14 May 2009, during a question and answer session in the Legislative Council, a member asked the Chief Executive about his opinion on the twentieth anniversary of the June 4 incident. Donald

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Tsang replied that he represented the people of Hong Kong in saying that one should recognise the tremendous progress the country has made since then and that one should look forward and form a more objective assessment of this past event. His remark drew an angry reaction from the pro-democratic members who walked out of the Chamber in protest. Donald Tsang retracted this statement immediately when he met the media afterwards. But his words resulted in an estimated number of 200,000 people attending the candle-light vigil in the evening of 4 June, the largest number since the annual event first took place in 1990. Donald Tsang might have made a politically correct statement, in line with the official position of the central government. But it was certainly not in tune with the large number of people in Hong Kong who chose not to forget the traumatic scenes they saw on the TV screens 20 years ago. His popularity suffered another setback as a result.

12. A Brief Rebound That Was Not Sustained A year after the June 4 gaffe, the Manila hostage case that took place in August 2010 provided an opportunity to establish Lai Tung-kwok’s credentials as a capable Under Secretary, and more importantly helped to lift Donald Tsang’s popularity. Following the tragic event that took the lives of eight Hong Kong tourists, Donald Tsang took decisive steps to arrange for the return of the badly shaken and some seriously injured Hong Kong victims back home. He openly criticised the Philippines government for mishandling the crisis and undertook to pursue the matter until justice was done. He was always there to comfort the families of the deceased and to visit the injured victims in the hospital. His determination and compassion won the hearts of many Hong Kong people. As a result, his support rating shot up from the previous low point of 51.3 to 58.5 in late August 2010.[16] Unfortunately this turned out to be a brief rebound before his popularity

16. Indicators on Chief Executive Donald Tsang Yam-kuen’s Popularity, the Hong Kong University Public Opinion Programme.

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continued to follow the declining trend. This was because he was not able to maintain this support rating with concrete action to address the major concerns of the people, in particular the continuing rising property prices. His 2010 Policy Address delivered in October 2010 failed to meet public expectations and his support rating continued on the downward trend. According to HKU POP survey conducted after the 1 July 2011 demonstrations, Donald Tsang scored a support rating of 45.6 marks, a record low, and his two deputies Henry Tang and John Tsang scored 46.0 and 44.9 marks respectively. The Director of POP,[17] Robert Chung commented that the support ratings of Donald Tsang, Henry Tang and John Tsang were all close to the danger line of 45 marks. If the situation persisted, the government would fall into a governance crisis. With an approval rate at 24%, disapproval rate at 64%, and net popularity at negative 40 percentage points, Donald Tsang’s performance was “depressing” and close to “disastrous”. As for the three Secretaries, with an approval rate at 29% and a disapproval rate at 30%, Henry Tang registered a negative net popularity for the first time. John Tsang’s support rating at 44.9 marks and approval rate at 21% were at their all-time low since he was appointed as Financial Secretary. The Secretary for Justice, Wong Yan-lung, who is always among the most popular principal officials, maintained a positive support rating at 55.7 marks, and an approval rate at 54%. However, these figures were the worst since his appointment, probably due to his half-hearted handling of the proposed legislation relating to the replacement mechanism for filling Legislative Council vacancies. As for the Directors of Bureau, the approval rate of the newly appointed Secretary for Commerce and Economic Development Gregory So was 22%, and with a recognition rate of less than 50%, his performance, according to Robert Chung, fell into the category of “inconspicuous”. The disapproval rate of Stephen Lam went up to its record high at 41% since he took office. Meanwhile, the disapproval rate of Michael Suen passed the 50% benchmark again, making his performance “depressing”.

17. See the report of Ming Pao ( a local Chinese Newspaper ) on 19 July 2011.

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13. Taking the Government’s Proposal to the People? The essence of the Accountability System is to win public support of government policies so that the unelected Chief Executive and his administration can override the belligerent Legislative Council, whose members, particularly those coming from the democratic camp and labour unions, always adopt a socialist approach on livelihood matters. On political issues, while the pro-China members have a safe majority, changes to the election of the Chief Executive and that of the Legislative Council members leading to the objective of universal suffrage promised in the Basic Law require approval by a two-thirds majority of the members. The political strength of the Accountability System was put to the test when the government proposed to change or improve the methods of electing the Chief Executive and the members of the Legislative Council in 2012, supposedly to facilitate the implementation of universal suffrage in 2017 for the election of the Chief Executive in 2017 and that of all the members of the Legislative Council in 2020. For a long time, the 2012 political reform package proposed by the government in April 2010 seemed to be heading towards the same fate as the last package (for elections to be held in 2008) put forward by the government in 2005, which was successfully blocked by the democratic camp in the Legislative Council. As a protest against the government’s undemocratic proposal, five members from the League of Social Democrats and the Civic Party in the democratic camp, each of whom came from one of the five districts in the geographical constituency, resigned from the Legislative Council, thus forcing a territory-wide by-election that the two parties described as a referendum for the early implementation of universal suffrage. This move infuriated Beijing which condemned it as a violation of the Basic Law that contains no stipulation on referendum and ordered the pro-China parties to boycott the by-election. Donald Tsang also criticised the resignation as unnecessary and wasteful of public funds needed to conduct the byelection. After weeks of posturing on whether he should cast his vote at the by-election, he eventually decided not to do so. While his decision, which was shared by the political officers, was in line with the Beijing position,

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it raised the question whether the Chief Executive, who is responsible to Hong Kong under the Basic Law, should boycott a lawful by-election conducted by the government, irrespective of the motive of the individuals whose action caused it to take place. Although the five resigning members won back their seats in the virtually uncontested by-election, the voter turnout at the by-election in May was a mere 17%, way below the expectation of the organising parties. True to the spirit of the Accountability System, Donald Tsang decided to take the government’s 2012 political reform package to the people. He launched a community campaign with the slogan “Act Now” and took his team of principal officials, including the Secretary for Justice, to various districts, chanting slogans and meeting people in the streets and shopping arcades. With no previous campaigning experience, the officials appeared hesitant and awkward when they were confronted by their political opponents or ordinary people during the district visits. While the show may have been a good way to remind the political officers that their job is to connect with the people, it did not result in any increased support for the government’s proposal. Donald Tsang then did something which surprised everyone in Hong Kong. He challenged Audrey Eu Yuet-mee, the Civil Party leader and spokesperson of the “five district referendum movement” to a public and televised debate on political reform. During his 40 years of public service, Donald Tsang has proven to be capable administrator; but he is not a good public speaker, let alone somebody who can take on a reputable Barristerat-Law in the person of Audrey Eu. One could only speculate that he wanted to show Beijing and the people of Hong Kong that he would do everything possible to push the central government-endorsed package, to the point of humiliating himself.

14. New Political Culture or Old Unfulfilled Promise? The outcome of the debate that took place on 17 June 2010 did not surprise anyone watching it, except for the fact that Donald Tsang fared

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even worse than expected.[18] But he scored well after the debate by saying that it was a victory for Hong Kong people because they had heard both sides of the argument. He also used this debate as marking the beginning of a new political culture that would make the Chief Executive accountable to the public and explain the issue in a more public manner. This new political culture, he said, meant that the public would be given a greater opportunity to appreciate and take part in the political process; it also meant that government officials henceforth could not make policies in their own offices. However good the policy proposals, the government should explain these to the public and seek their support. Donald Tsang said that he hoped to see an open, tolerant, and consensus seeking political culture taking root in Hong Kong. If these words were meant to say that the government would finally take the Accountability System more seriously and would not be put forward new policies without prior engagement with the people, they certainly sound hollow in the subsequent notorious case involving the proposed replacement mechanism. Nobody knew beforehand how the government worked up the original proposal. Nobody understood why the government insisted on rushing the legislation without conducting a public consultation. The government finally backed down when the pro-establishment legislators reneged on their promise of support after hundreds of thousands of people voted against them by foot on 1 July. Throughout the farcical turn of events, we did not hear any word from the Chief Executive on how he practised the new political culture in putting forward the original proposal and making two U-turns within two weeks.

15. Public Evaluation of the Accountability System Since January 2003, the Hong Kong Institute of Asia-Pacific Studies of the Chinese University of Hong Kong conducted regular surveys on the public’s evaluation of the performance of the Accountability System.[19]

18. Chinese press release from the Chief Executive’s Office on 17 June 2010, see www.info.gov.hk/gia/ general/201006/17/P201006170273.htm 19. Research Series of the Hong Kong Institute of Asia-Pacific Studies of the Chinese University of Hong Kong, for further details see www.cuhk.edu.hk/hkiaps

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During the Tung administration, the support rating generally hovered below 50 (out of 100), hitting as low as 37.8 in March 2003 when half a million people marched in protest against the proposed Article 23 legislation. When Donald Tsang assumed the office of the Chief Executive, the public gave a positive assessment of the system, attracting a rating of 57 before the announcement of the new Under Secretaries and Political Assistants. The blunders associated with the appointment of the new political officers caused the support rating to drop significantly to 48 in August 2008. With the whole expanded team performing worse than before, public evaluation of the Accountability System hovered below the pass mark of 50, hitting the lowest level at 41.4 in March 2009. It rebounded to 48.1 in August 2010 in recognition of the government’s performance over the Manila crisis. It then continued its downward trend and stood at 41.5 in June 2011.

16. Conclusion When Donald Tsang took over from C. H. Tung as Chief Executive, very few people could have predicted that he would turn out to be so disappointing, and in some respects worse than his predecessor. And nobody would have thought at the time that Donald Tsang’s track record as a capable administrator would fail to help the government in making better policies and implementing them effectively. While C. H. Tung did not succeed in converting himself from a businessman into a politician, Donald Tsang must have thought at the start of his term that he should have no problem elevating himself from a respected public administrator to a people’s leader. Not only did he hand-pick his team of principal officials, but he also expanded the Accountability System and personally appointed two additional layers of political officers. He would have made a significant contribution to Hong Kong if he had succeeded in making the Accountability System a credible replacement for the old colonial model of government in which senior civil servants performed political duties but were not accountable for their policies or decisions. A strengthened ministerial system, connecting the Chief Executive and his ruling team with the people, would also have better prepared Hong Kong for a more

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democratic system of governance, in keeping with the ultimate objective of universal suffrage. What happened was that Donald Tsang almost single-handedly demolished the system and honoured the relatively new principle of political accountability in breach rather than in practice.

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C h a pt er 3

The Hong Kong Legislative Council A Friend or an Enemy of Donald Tsang? Jermain T. M. LAM Associate Professor, Department of Public and Social Administration City University of Hong Kong

1. Introduction The Hong Kong Special Administrative Region (HKSAR) Legislative Council has been undergoing significant changes in structural composition and political character. The constitutional reforms of 2012 promise to bring further changes to the political landscape in Hong Kong. These changes have exerted tremendous impacts on the role and status of the Legislative Council in relation to the administration. The changing executive–legislative relations have in turn triggered significant impacts on the governance of Hong Kong in general and on the Tsang administration in particular. The changes to the HKSAR Legislative Council have transformed the nature of politics in Hong Kong in several aspects. The first aspect of change is the emergence of and dominance of party politics within the Legislative Council.  Elections facilitated the emergence of political parties as candidates could gain more political resources from political parties during election campaigns. Legislators could also have a larger say during

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the legislative processes if they joined together under the same party label. Thus elections of the Legislative Council consolidated the operation of party politics by bringing members with a party background and affiliation into the legislature. In the Tsang years, the Democratic Party, the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), the Civic Party, and the Liberal Party were the major parties in the Legislative Council. On many issues, two major political camps formed in the Legislative Council; the democratic faction was led by the Democratic Party, while the pro-government camp was led by the DAB. The quest for conflict resolution and resource allocation in Hong Kong was conducted in the form of party politics. Political parties played an active role both inside and outside the Legislative Council. As most of the seats of the Legislative Council were occupied by political parties, decision-making was no longer confined within the Tsang administration, but rather among the political parties in the Legislative Council as well as between the Tsang administration and the political parties. The competition or cooperation among political parties in the Legislative Council and the interactions between the Tsang administration and political parties became the crucial processes in allocating values of the Hong Kong society. The second aspect of change was the creation of an adversarial legislature and adversarial politics in Hong Kong. The increasing role of the Legislative Council was partly a result of the introduction of elected members who had to demonstrate to their constituents that their interests were fully represented and defended. Elected legislators were determined to maximise their role as deputies to monitor the administration, to amend government bills, to ask questions, to initiate private member’s bills, and to hold the administration accountable. Under the constitutional framework, members of the Legislative Council were free of the responsibilities of office. They therefore could indulge in factious opposition to the administration without any restraint. The initiative to govern was no longer the exclusive privilege of the administration, but was shared by the elected politicians who were prepared to share the power of governing. The HKSAR Legislative Council had become a political weapon to challenge the administration, an arena to actualise elected politicians’ ideals, and a training ground to consolidate political power. The executive– legislative relationship since the introduction of elected membership in

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the Legislative Council has been described as confrontational (Miners, 1994, p. 224). The previous consensus associated with the “administrative absorption of politics” (King, 1975) was no longer the main form of politics in Hong Kong. As elected politicians and party members have their own political interests and agendas, political confrontation and struggle with the government is inevitable. Pro-government parties like the DAB and the Liberal Party are increasingly critical of the government, let alone the opposition Democratic Party. In this chapter, the changing executive–legislative relations will be analysed from the frameworks of the assertive/co-equal/adversarial/ submissive and active/reactive/minimal paradigms. The political dynamics between the administration and the Legislative Council will be examined through analysing the membership and the balance of power in the Legislative Council. The political impacts of the changing executive– legislative relations will be discussed from the perspectives of governance. From the governance point of view, it is important to understand how the emergence of an adversarial and divided legislature affected the legitimacy of the Tsang administration, the political stability of Hong Kong, and the political integration of the society.

2. HKSAR Legislative Council —  An Adversarial Legislature vs Donald Tsang The HKSAR Legislative Council during the term of office of Chief Executive Tsang from 2005 to 2012 behaved not only as an active and independent legislature, but also as a critical partner of the Tsang administration. Legislatures can be distinguished into different types according to their strength relative to the executive. Mezey (1990) suggested that legislatures can be compared on the basis of their policymaking role, because this is an indication of their overall importance within political system. In actual fact, the strength of legislatures varies substantially. In some countries, they actually made legislation and are the focal point of national politics. In others, they act merely as rubber stamps and were nothing more than an occasional side-show. Thus the variation might be classified according to the relative power exercised or the

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prominence of the role of the legislature in the political system, ranging from weak to modest to strong. In Mezey’s (1990, p. 168) classification, a “minimal legislature” has no or weak policy-making power. It can neither reject nor amend policy proposals put by the government. It cannot constrain those who make policy and lacks the capacity to oppose and the willingness to criticise. A “reactive legislature” has modest policy-making power. Although the legislature does not have the effective power to say no to the government, the legislature can set certain parameters within which the government has to act and thereby discourages the government from introducing legislation that would cause a row in the legislature. Dissent from legislators might convince the government to modify legislation before submission to the legislature. An “active legislature” has strong policy-making power. The legislature stands at the centre of the policy-making process. Its capacity to reject, to amend, or to ignore policy proposals initiated by either the executive or its own members is vigorous. Curtis (1978) alternatively classified legislatures based on the executive– legislative relations. The main criteria are the initiative and autonomy of the legislature. The classification constructs a continuum, ranging from fully closed political systems where the legislature is entirely submissive to the executive to open regimes where the legislature is largely dominant. In Curtis’s (1978, pp. 203–206) typology, a “submissive legislature” has almost no decision-making power in terms of initiative and autonomy in the political system. It simply declares and provides a platform for policies made by the executive. By endorsing policies, it allows the appearance of popular approval, though it has no real legislative, representative or responsible functions. Opposition to or serious criticism of official policy is not tolerated. In short, a submissive legislature is executive-controlled. An “adversarial legislature” has considerable scope to influence and scrutinise the executive under an executive-led system. Its role is essentially reactive, responding to policy-making initiatives from the executive. It ratifies legislation. Its proceedings are understood as a form of legislative theatre for the electoral audience rather than an autonomous legislature at work. The executive sets its legislative programmes before the legislature and normally expects to see almost all its proposed legislation enacted, owing to the fact that the executive occupies a disciplined party majority in the legislature. However, formalised

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confrontation between the executive and opposition may take place in an adversarial legislature. The tasks of the opposition are to oppose, to force the executive to account, and to question, debate and criticise its policy. A “co-equal legislature” is elected separately from the executive, its existence, organisation and procedures are not dependent on the executive. As such it claims a position of equality with the executive. A co-equal legislature has a substantial policy-making initiative and autonomy. Both executive and legislature can initiate and veto policies independently, thus realising the principles of separation of powers and checks and balances. The status and role of a co-equal legislature is enhanced by its powerful structure of committees and sub-committees, its powers over finance, its approval of executive appointments, and its power and resources for obtaining information. An “assertive legislature” tends to dominate the personnel engaged in and the nature of decision-making to the degree that the executive can never be certain it possesses a majority for its policy. An assertive legislature not only provides the source of membership for the executive, but also has real control over the existence and activity of the executive. It even frequently overthrows the executive from office and the result is that executive leadership can only rarely be exercised. In short, an assertive legislature operates in a legislative-led system. Constitutionally speaking, the HKSAR government by default is an executive-led system. The executive plays a dominant role vis-a-vis the Legislative Council in the political system in many aspects. The executive initiates and drafts almost all the bills for the HKSAR Legislative Council to enact. In return, the Legislative Council only reacts to the decisions already made by the executive. The executive also actively prioritises the importance of competing policies and determines the schedule of implementation, while the Legislative Council passively responds to such activities in the legislative processes. In approving government budget, the Legislative Council cannot increase the expenditure requested, but only reduce or reject it. The Legislative Council cannot change the ways to raise revenue or change the taxation system, for these are the sole responsibilities of the executive. The Legislative Council can only advise the executive to avoid wastage in resources, but cannot instruct officials to follow its suggestions. According to Article 74 of the Basic Law, members of the Legislative Council may introduce bills, but this comes

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with conditions. Bills which do not relate to public expenditure or the political structure or the operation of the government may be introduced. The written consent of the Chief Executive shall be required before bills relating to government policies are introduced. The Legislative Council does not have any legal means to sanction any official whose performance is found to be unsatisfactory. A vote of no confidence motion is only advisory but not binding on the Chief Executive to remove any principal officials under the Principal Officials Accountability System (POAS). All in all, the HKSAR Legislative Council cannot escape from these built-in weaknesses which are the features of an executive-led system. Nevertheless, the HKSAR Legislative Council behaved as an adversarial or reactive legislature during Tsang’s term of office from 2005 to 2012. The significant role of the Legislative Council during this period was to keep the Tsang administration accountable and responsive. The Legislative Council as a whole was not satisfied with playing just an advisory role but it was determined to apply political influence and pressure on the Tsang administration. Politics of confrontation replaced politics of consensus as the rules of the game between the Legislative Council and the Tsang administration. Opposition voices against the Tsang administration from parties across the political spectrum were loud inside the Legislative Council, thus compelling the Tsang administration to make compromises and to improve its performance. Confrontation between members of the Legislative Council and Tsang’s governing team were common. The background of the members of the Legislative Council was very pluralistic, hence they represented a wide spectrum of interests of Hong Kong society. As such, they did not share the same interests and views with the Tsang administration. They were willing to exert their influence on the administration, though their powers were constitutionally limited. Inside the legislative Councils, debates were heated and questions were critical. Thus adversarial politics characterised the relationship between the Legislative Council and the Tsang administration. Although the Tsang administration was still the dominant political actor, the Legislative Council was able to exert its power through manipulation and persuasion. The real power of the Legislative Council was counted not on the basis of its constitutional power, but rather on its political influence generated from the democratic political atmosphere in Hong Kong after the political

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transition. Ideas of open government and democracy were wide-spread in Hong Kong such that the Tsang administration was expected to follow public opinion and to be closely scrutinised. The Legislative Council claimed to represent public opinion and therefore asserted its legitimacy to monitor the Tsang administration. The political value of the Legislative Council lay in its critical attitude to prevent the Tsang administration from alienating the public and abusing its powers, rather than on its capabilities to govern through issuing orders and commands. The 2004 and 2008 HKSAR Legislative Council election results caused some repercussions on the relationship between the legislature and the Tsang administration. Superficially, the composition of the Legislative Council in the 2004 and 2008 sessions favoured the governance of the Tsang administration. Members of the pro-establishment camp (DAB, the Federation of Trade Unions, the Alliance, the Liberal Party, and conservative independents) captured a majority of all the seats in the Legislative Council. Chief Executive Tsang and the pro-establishment camp could form a grand ruling coalition in the government, ensuring that government bills could be passed with a built-in majority. The domination of the pro-establishment camp in the functional constituencies also meant that any private member’s bill initiated by the pro-democracy camp could be defeated. An optimistic assessment of the 2004 and 2008 election results would therefore suggest that the executive-led system and the governance of the Tsang administration would be strengthened. However, this assessment was based on an assumption that the ruling alliance of Tsang and pro-establishment camp was united and coherent. A closer look at the 2004 and 2008 election results suggests that this assumption is flawed, as the Tsang-pro-establishment camp alliance was in fact fragile. The pro-establishment camp gained steadily more votes in the geographical constituency (GC) elections in 2004 and 2008 when compared with 2000 (Table 3.1). The implication of these figures is that the hands of the proestablishment camp were increasingly tied by the need to represent the interests of the people. In order to retain their directly seats in future elections, the pro-establishment camp grew closer to the people and better reflected their mood and thinking. This forced the pro-establishment camp

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Table 3.1 Performance of the Pro-establishment Camp in Geographical Constituency Elections

% of votes gained by the pro-establishment camp in Geographical Constituencies

2000

2004

2008

34.4%

37.2%

39.6%

Source: South China Morning Post, 9 September 2008.

to become more independent, if not critical, of the Tsang administration. A political alliance with Chief Executive Tsang would be a positive gain if the administration’s policies proved to be highly popular. In contrast, such a close political alliance would be a negative burden for the proestablishment camp if the administration’s policies turned out to be unpopular with the general public. Various opinion surveys showed that Chief Executive Tsang suffered from low popularity ratings during his seven-year term. Where the political leadership was weak and the government was lacking in popularity, it was doubtful whether the ruling coalition partners would remain loyal to Chief Executive Tsang and support all of his policies wholeheartedly. Being a pro-establishment party and also one that claimed to have popular electoral support was difficult to reconcile. This dilemma affected the legislators in the pro-establishment camp. As the DAB gained more electoral votes and legislative seats from geographical constituencies, it had to stand on the people’s side when the administration introduced unpopular policies. Yet the DAB, with the strong expectation from the Chinese government, had taken the political role of being a pro-government party to help the Chief Executive govern Hong Kong. The conflicting roles and interests created difficulties and embarrassment for the DAB. The Liberal Party faced the same conflict of interests. The Liberal Party gained much popularity after its former chairman James Tien resigned from the Executive Council to protest against the government’s stance on a national security bill. After winning two seats in the GC in the 2004 Legislative Council election, the Liberal

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Party was expected to represent the interests of the people rather than the government. Unfortunately, the Liberal Party suffered a huge electoral setback in the 2008 Legislative Council GC election, with a loss of two directly elected seats. This led to a soul-searching exercise for the Liberal Party on whether to stand more on the side of the people or the side of the Tsang administration. In any case, the pro-establishment camp faced rising expectations from the general public to be more independent of the Tsang administration and more representative of the people. The inherent differences between the economic orientations and backgrounds of the supporters of the DAB and Liberal Party made it even more difficult for the ruling coalition to reach a consensus in the Legislative Council. Given the increase in the number of votes they captured in GC elections and their rise in popularity, the political bargaining power of the proestablishment camp vis-à-vis Chief Executive increased. The dominant position of the Chief Executive Tsang in the ruling alliance declined. The pro-establishment camp, particularly the DAB, had a louder voice and grew more confident in their dealings with the Tsang administration. Chief Executive Tsang could not count on receiving unconditional support from the pro-establishment camp in general, or the DAB in particular. The Tsang administration experienced an uncomfortable shift in its relationship with its most closely allied party, the DAB. Support for the Tsang administration by the DAB for instance was low in the 2010–11 legislative year, with the party abstaining or actively voting against the government in the Legislative Council more often than in the 2009–10 legislative year. An analysis of the voting found that of the 23 bills and amendments the government tabled in 2010–11 legislative year, the DAB voted for 20, compared with its support for 15 out of 16 bills in 2009–10 (South China Morning Post, 16 August 2011). Although the drop in support was not significantly large, there was a growing distance between the DAB and the Tsang administration. In the 2010–11 legislative year, the DAB had open differences with the government on a number of issues, such as the repeal of a government order to expand a land-fill site, a vote in the Finance Committee against a bid to host the Asian Games, and opposition to details of the government’s planned increase in vehicle tax. The Deputy Chair of the DAB, Starry Lee, commented that “there was

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an apparent necessity for the government to improve in handling public opinions” and that “the government’s consultation mindset — its tendency not to consult lawmakers before announcing policy or legislation, or to merely pay lip service to consultation — was in need of an overhaul”. (South China Morning Post, 16 August 2011). The rebellious behaviour of the DAB threatened to upset its ties with the Tsang administration. The relationship between the DAB and the Tsang administration was labelled by Choy (2011) as a “pragmatic cooperation between partners rather than the sacred coalition it used to be”. The DAB was more cautious, with elections looming and the government’s popularity wallowing in the doldrums. The DAB did not want to stand at the opposite end of public opinion, especially during election periods. Although the pro-democracy camp (Democratic Party, Civic Party, League of Social Democrats, and other organisations/independents) was the minority in the Legislative Council, with 25 seats in the 2004 session and 23 seats in the 2008 session, it always occupied at least one-third of the total seats. This gave the pro-democracy camp the veto power over constitutional reforms and the election methods for the Chief Executive and the Legislative Council in 2012. The pro-democracy camp was capable of exerting pressure on the Tsang administration concerning the 2012 political reforms. The first political reforms bill initiated by Chief Executive Tsang was defeated in December 2005 with the united opposition of the pro-democracy camp. The second political reform bill was finally passed by the Legislative Council in June 2010 with the support of the Democratic Party based on the revised Super District Councillor Model. It should be pointed out there were internal differences within the pro-democracy camp and that the members were reluctant to organise themselves into a formal alliance with a concrete action plan. Yet on some grand democratic principles and practices such as monitoring the Tsang administration and defending Hong Kong’s autonomy, the prodemocracy legislators were to a large extent united and shared a lot of common ground for cooperation. After all, the pro-democracy camp posed a serious challenge to the Tsang administration and was a constant force that made the executive–legislative relationship confrontational and tense. The emergence of new political stars, new political parties, and independents also made the HKSAR Legislative Council more divided

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and adversarial to the Tsang administration. In the 2004 Legislative Council GC election, the entry of new popular and radical figures into the legislature created further difficulties for the Tsang administration. Members of the Civic Party (formerly known as the Article 45 Concern Group) such as Ronny Tong and Alan Leong represented the professional views of the pro-democracy camp within the Legislative Council. They carried a large measure of support from the general public, and represented aspirations of a type different from those represented by the Democratic Party. The voices represented by Leung Kwok-hung of the League of Social Democrats (LSD, formerly known as the April Fifth Action) and independent Albert Cheng presented another kind of challenge to the governance of the Chief Executive. Both of these legislators had a significant number of supporters and were vocal in their opposition to the Tsang administration. They represented the interests of the lower class, and advocated the introduction of radical political, economic, and social reforms. Leung was well known for his radical behaviour and thoughts. His election to the Legislative Council on a populist platform added a new element of instability and uncertainty into the executive–legislative relationship. As the socio-economic situation of Hong Kong worsened during Tsang’s governance from 2005 to 2012, the populist sentiment grew and fuelled more support for the League of Social Democrats. The 2008 Legislative Council election further added new blood into the legislature, making it more unpredictable and divided. There were 17 new-comers elected into the Legislative Council, including Regina Ip, Wong Yuk-man, Starry Lee, Wong Kwok-kin, Tanya Chan and Priscilla Leung. Regina Ip was the former Secretary for Security during Tung’s governance and she later established a new political party known as the New People’s Party in early 2011. The party represented the interests of the professional middle class who aspired for a stable course of political and socio-economic development. Wong Yuk-man was the chairman of the radical LSD and his successful election bid reflected a growing populist sentiment in the city. Starry Lee was a rising star of the DAB, representing the new young generation of the party. Wong Kwok-kin was a veteran in the leftist Federation of Trade Unions, defending the interests of the working class. Tanya Chan was a rising star of the Civic Party and her victory reflected the continuity of support for the party by the general

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public. The victory of Priscilla Leung as an independent showed that voters preferred some independent voices within the Legislative Council. The Tsang administration faced a tough battle in lobbying newly elected lawmakers to support its policies as the Legislative Council became more fragmented with the strengthening of radical groups and the increased number of trade unionists. The number of LSD lawmakers increased from two in 2004–08 to three in 2008–12 and the number of lawmakers with a trade union background also increased from three in 20–2008 to six in 2008–12. These lawmakers who were keen on using mass mobilisation strategies to fight for their interests made the Tsang administration more difficult to govern. Their concerns for the social and economic plight of the lower class expressed inside the Legislative Council also sharpened the class conflicts of the society, creating further hurdles for the pro-business government to resolve the rich-poor gap in Hong Kong. The election of more non-affiliated legislators and those from small groups also presented more difficulties for the Tsang administration to lobby for their support. In short, the Legislative Council in the 2004–08 and 2008–12 sessions was divided, fragile, and adversarial to the Tsang administration, rendering an unstable executive–legislative relationship during the period of Tsang’s governance from 2005 to 2012.

3. Chief Executive Tsang’s Record in the Legislative Council Chief Executive Tsang’s mentality about the executive–legislative relationship is reflected in the press conference for his maiden policy speech on 12 October 2005 when he first assumed office. Chief Executive Tsang made it clear that sharing power with the legislature was totally out of the question: “It is important to remember that it is now an executiveled government. The Basic Law did does not mention power-sharing”. (South China Morning Post, 13 October 2005). As such, Chief Executive Tsang was determined to follow the executive-led system and to further consolidate his executive power over the Legislative Council. Tsang initiated a series of reforms immediately after his assumption of office in his maiden policy address “Strong Governance”. By strong governance,

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Tsang meant that “Hong Kong will practise executive-led government” and that “the Chief Executive is the head of Hong Kong and leader of the Hong Kong government”. (Tsang, 2005, p. 3) The implicit message was that Tsang wanted to consolidate his political power by strengthening his control over the Legislative Council and major political parties. By introducing reforms in the governing machinery, Tsang hoped that he could regain power and control over the legislators through emphasising the principle and practice of executive leadership. These reforms included the expansion of the Executive Council by appointing more non-official members, re-defining the role of ministers who were not required to attend regular Executive Council meetings except when their policy portfolio was concerned, reactivating the Commission on Strategic Development, expanding the role of District Councils, and proposing a constitutional reforms package related to the 2012 Chief Executive and Legislative Council elections. Chief Executive Tsang faced the first serious setback in his governance only three months after his assumption of office. His constitutional reforms package for the 2012 elections was defeated in the Legislative Council on 21 December 2005. Although backed by all the pro-establishment lawmakers, the reforms bill was still defeated upon failing to obtain the two-thirds majority as required by the Basic Law when 24 pro-democracy lawmakers voted against the bill. This was the first serious blow to the authority and leadership of the Tsang administration. Tsang would not touch on the issue of constitutional reforms again until 2010. Expanding the Executive Council by adding more non-official members and asking the bureau ministers only to attend those Executive Council meetings with items on the agenda that directly concerned their portfolios neither increased any degree of political accountability to the Legislative Council, nor eased tensions between the legislative and executive branches. The whole theme of Tsang’s executive revamp was to underline the importance of the executive-led principle and to enhance the power of the executive vis-à-vis the legislature. The appointment of non-official Executive Council members and bureau ministers remained the business of the Chief Executive solely, without the need to seek approval from the Legislative Council. A vote of no-confidence from the Legislative

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Council with respect to any bureau minister was also merely a nonbinding resolution. There was no new arrangement to increase the degree of political accountability of the executive to the Legislative Council, or to increase the policy-making and supervisory powers of the legislature. The Legislative Council was subject to various constraints in the areas of legislation and supervision. Ma (2002, p. 367) was right to point out that the post-1997 legislature was relatively more successful than the pre1997 legislature in increasing the transparency and responsiveness of the indirectly elected Hong Kong government. However, this might be due to the strong determination of the elected members of the Legislative Council, rather than the efforts of the administration. There was no attempt by Tsang to elevate the political status of the Legislative Council, let alone to remove any of these constraints. Chief Executive Tsang’s narrow mindset was again revealed by his statement made in the Legislative Council that “there would be differential treatment for those who support the government from those who oppose the government.” (South China Morning Post, 15 May 2006). Tsang did forge intimate ties with his allies and kept a distance from his foes; the appointment of members to a new task group on constitutional development under the Commission on Strategic Development in 2008 was a case in point. Only six of the 30 members of the task group were from the pro-democracy camp, with the remaining 24 seen as proestablishment figures (South China Morning Post, 3 March 2008). The level of cooperation and trust between the Tsang administration and the pro-democracy camp in the Legislative Council was seriously damaged. The democrats were further marginalised and they reacted by assuming a more radical stance and mounting oppositional activities both inside and outside the Legislative Council. The resignation campaign of five legislators from five GC in 2010 to demonstrate their demand for universal suffrage for the election of the Chief Executive and the whole Legislative Council in 2012 was a sign of serious distrust and antagonism between the radical pro-democrats and the Tsang administration. The support of the pro-establishment camp was also not firm on all issues and their relationship with the Tsang administration was not reliably stable. The Liberal Party was opportunistic in framing its relationship

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with the Tsang administration. During the early period of the Tsang administration, the Liberal Party had taken a distant stance vis-à-vis the Tsang administration. The former chairman of the Liberal Party, James Tien, said “there is no need for us to defend him … there is no need for us to say anything for the government any more. I don’t know whether we are still considered a part of the ruling alliance”. (South China Morning Post, 10 March 2005) Tien further requested that “the Tsang administration should aim to listen more to the voices of the elected representatives and less to those of unelected officials, and involve our party actively in the policy-making process”. (South China Morning Post, 2 April 2007). The Liberal Party made it clear that “unless the existing mode of cooperation is changed — to accommodate two-way communication between ourselves and the executive in policy-making  it will be extremely difficult for us to have a working partnership in the Legislative Council”. (ibid.) These statements reflect that the Liberal Party was highly dissatisfied with the ways treated by the Tsang administration. During the period of Tsang’s governance, the support from the Liberal Party for the Chief Executive could not be taken for granted. The support of another pro-establishment ally, the DAB, was more reliable, but not without resentment. The vice chair of the DAB, Starry Lee, said “the party was widely seen as a close ally of the government, but it needed to be seen in a new light.” (South China Morning Post, 26 April 2011). Lee acknowledged that “it is somehow sad when the public feels we always stand with the government — a distance is needed”. (ibid.) This trend went farther when the DAB decided to expand its electoral base from its traditional workingclass base to the middle-class and professionals. The DAB became more pluralistic and people-based, sometimes causing embarrassment in its relationship with the Tsang administration. With the increasingly adversarial relationship between members of the Legislative Council and the Tsang administration, the government suffered numerous defeats in the 2010–11 legislative session. For instance, a motion in October 2010 to repeal a government order extending the Tseung Kwan O land-fill site by five hectares into Clear Water Bay Country Park was passed almost unanimously by the lawmakers. Another example of the government’s defeat was the embarrassing and unprecedented failure of a procedural funding request to the Legislative Council to allow the business

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of government to continue during the 2011–12 budget voting. The Finance Committee voted against the request in January 2011, which vetoed the administration’s bid to host the 2023 Asian Games. The government’s sudden U turn on agreeing to launch an consultation exercise on the future arrangements of Legislative Council by-elections in 2011 in the face of strong criticism in the Legislative Council was also embarrassing. According to a study conducted by Synergynet (2012), the success rates for the Tsang administration to pass its bills and policies from 2005 to 2012 was unsatisfactory. The findings are summarised in Table 3.2. From 2005 to 2012, about one-third (30.28% or 43 out of 142) of the bills initiated by the Tsang administration were either withdrawn or delayed. Even in the first year of the Tsang administration in 2005–06, which was supposed to be the honeymoon period between Chief Executive Tsang and the Legislative Council, Tsang faced the highest percentage of bills withdrawn or delayed (52.17% or 12 out 23 proposed bills). The success rate of legislation in 2005–06 was only 47.83%, with only 11 bills passed out of 23 bills proposed. In subsequent years, from 2006–07 onwards, the percentage of bills withdrawn or delayed gradually declined, perhaps as a result of more consultation between the Tsang administration and the Legislative Council. The success rate of legislation increased from 47.83% in 2005–06 to 86.67% in 2007–08 which was properly the golden period for the Tsang administration. However, the success rate of legislation began to drop in 2008–09 (62.96%) and decreased further to 59.09% in 2009–10. In 2010–11, the legislative success rate plunged to the lowest rate of 45%. The legislative success rate rose slightly to 50% in the last year of the Tsang administration in 2011–12. The overall success rate of legislation from 2005 to 2012 was 59.86%, with just more than half of the bills (85 out of 142 bills proposed) finally passed by the Legislative Council. The above findings show that the executive– legislative relationship was not so smooth and the Legislative Council was adversarial to the Tsang administration. Many of the bills proposed by the Tsang administration were unpopular with the members of the Legislative Council across parties in the political spectrum. The Tsang administration failed to win comfortable support from the Legislative Council which became a major obstacle for Chief Executive to govern effectively.

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66.67%

18

18

33.33%

9

27

2006—07

86.67%

13

13

13.33%

2

15

2007—08

62.96%

17

17

37.04%

10

27

2008—09

Source: Synergynet (2012) An Assessment Report on the Governance of the HKSAR.

47.83%

11

Number of Bills Finally Passed

Success Rate

11

Number of Bills Finally Tabled

52.1%

12

Number of Bills Withdrawn/ Delayed

% of Bills Withdrawn/ Delayed

23

Number of Bills Proposed

2005—06

59.09%

13

16

27.27%

6

22

2009—10

Table 3.2 Success Rate of Legislation (2005–2012)

45%

9

16

25%

4

20

2010—11

50%

4

8

0%

0

8

2011—12

59.86%

85

99

30.28%

23

142

Total

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The Second Chief Executive of Hong Kong SAR — Evaluating the Tsang Years 2005–2012

A simple explanation for the poor performance of the Tsang administration in the Legislative Council might be the unpopularity of its proposed bills, such as bidding for the Asian Games and the expansion of the land-fill site in the Clear Water Bay Country Park area. Another reason might be the under-performance of the Principal Officials Accountability System (POAS). A study conducted by Synergynet revealed that only one of eight political assistants had briefed lawmakers in the Legislative Council since the post was created in 2008 (South China Morning Post, 13 December 2010). The political assistants’ low appearance rate in the Legislative Council exposed the incompatibility of their official duties with the political appointees system, which was aimed at improving the executive–legislative relationship. As Yep commented: “if they seldom speak in the Legislative Council, which is a major open political platform, how can they be accountable to the public?” (ibid.) The POAS system was supposed to make governance more transparent and to enhance the mutual understanding between the administration and the Legislative Council. The creation of political assistants, however, failed to help achieve these two purposes. Perhaps a more deep-rooted reason was related to the structural deficiency of the political system. As members of the Legislative Council are elected by their own geographical or functional constituencies, they are accountable to their own political parties or constituencies. As such, they behave independently and they have to prove both their performance and their existence. As the executive and the Legislative Council became competitors for power and influence, legislators were reluctant to cooperate with the executive authorities. What made the situation worse was that Chief Executive Tsang himself did not have a ruling party with members loyal to him sitting on the Legislative Council to support government bills. The political system of Hong Kong does not operate on a ruling party basis, making the Chief Executive’s power difficult to exercise. The Chief Executive Election Ordinance specifies that the Chief Executive should not have a party membership, resulting in a non-partisan Chief Executive. Moreover, as Chief Executive Tsang himself was not directly elected by the general public, it was difficult for him to claim leadership over those legislatortwlves who were directly elected by the people. Chief Executive Tsang had the political power to govern, yet he

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lacked a popular mandate. On the contrary, the directly elected legislators had a popular mandate, yet they lacked the political power to govern. There had been a “mis-matching of the operational logic” of popular elections in the Legislative Council with the non-elected Chief Executive (Li, 2001). Tsang’s attempts at executive and political reforms did not help to resolve the issues of political unaccountability and uncooperative executive–legislative relations in the quasi-democratic context of Hong Kong. As such, the relationship between the executive and the legislature became more adversarial, while the integration of the political system became weaker. Loh and Cullen (2005, p. 173) observed that “Hong Kong’s comparative lack of a strong governing capacity was significant and widely apparent”. Extending Loh and Cullen’s analysis, the failure to build a strong political unity and a constructive executive–legislative relationship largely limited the governance capacity of the Tsang administration. An observation from Regina Ip also sheds light on the problem of the executive–legislative relationship: At the current stage of democratic development, Hong Kong is in that awkward state where there was a competitive, even adversarial, relationship between the executive and legislative branches, but no organic party support for the executive. Such a structural disconnect was quite unheard of in other democracies. (South China Morning Post, 19 January 2009)

4. Impact of the Adversarial Executive — Legislative Relationship on Governance From when Donald Tsang assumed office, he emphasised strong leadership and effective governance. However, he experienced his first major defeat in the Legislative Council only six months after he had become the Chief Executive. The defeat of the 2005 reform package not only signified a success for the democratic camp, but also alienated the conservative camp that had firmly supported the government’s position. It was a double loss to Tsang. In fact, Hong Kong had been facing governance crises of varying degrees since the handover of sovereignty in 1997. Governance, as a political concept, emphasises the role of

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government in steering and regulating society. From this perspective, the basic role of government is to make policy and to influence the situation in the surrounding society (Ball & Peters, 2005, p. 18). The theoretical emphasis of governance is to move away from the institutions and powers of government towards the task of public regulation, a function government may share with other actors involved in regulating modern societies (Pierre & Peters, 2000, p. 7). Governance, then, refers to the various ways through which political life is coordinated (Heywood, 2000, p. 18). Understood to be the task of managing a complex society, governance involves the coordination of both public-sector and private-sector networks to get things done without having to command that they be done (Rhodes, 1996, pp. 652–667). Governance, therefore, implies persuasion exerted through a network, rather than direct control over a hierarchy (Hague & Harrop, 2004, p. 6). Another important theoretical element of governance is the focus on government activities, policies and achievements in regulating the polity, rather than on the internal organisation or its direct provision of goods and services. On this theoretical basis, “governance” refers to the activity, process or quality of governing (ibid.). In this context, governance implies what governments do and how well they do it. The concept of governance is, therefore, an important one when examining the activity and effectiveness of government. From the governance perspective, a review of Tsang’s record card in the Legislative Council exposed a fundamental problem with Tsang’s governance: his administration was not an effective regulator in the political arena. Specifically, Tsang faced political crises in various respects; with legitimacy, stability, and integration. The legitimacy of the political system in Hong Kong faced severe pressure, as it was not regarded as a truly representative system by democratic politicians or by the general public. Both democratic politicians and the general public have expressed a strong demand for universal suffrage to be implemented in Hong Kong, as evidenced by the annual 1 July mass rallies and regular opinion surveys. People often criticise the way that the Chief Executive and half of the legislators are elected by a small circle of electors restricted to a small number of conservative social

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and business elites. As Tsang insisted on not setting a timetable for full democracy, the legitimacy of the Chief Executive and the Legislative Council remained at a low level in the perception of the population. It could be counter-argued that universal suffrage was not the only basis for the legitimacy of the government, and that high legitimacy could derive from government performance. Kuan and Lau (2002, p. 333) argue that “people in Hong Kong already treasure the rule of law, freedom, and civil society. They are content with a government that is willing to consult the people”. Democracy in the sense of electoral democracy is a luxury. However, Tsang’s performance index is not high enough to earn him great respect and recognition from the general public and the politicians of the democratic camp. In a survey conducted by The University of Hong Kong released in March 2011, 38% of the respondents thought there was a “large” degree of governance crisis in Hong Kong and 31% thought “some” degree, while only 26% said a “low” degree (Ming Pao, 25 March 2011). A barely legitimate leader would face tremendous difficulties in persuading and coordinating the various actors in the political arena to support his policies and to regulate the polity. The subsequent withdrawal of the Tsang Kwan O land-fill site expansion initiative in 2010 from the Legislative Council was a case in point. The low degree of legitimacy of the Tsang administration coupled with an adversarial executive–legislative relationship jeopardised the political stability of Hong Kong. Mass rallies and thousands of people who were mobilised and went out onto the streets to express their dissatisfaction with the Tsang administration were common political exercises. Smallscale protests and demonstrations were also organised and held on a nearweekly basis, leading to Hong Kong’s nickname of “demonstration city”. Although the anti-government feeling is not at a dangerous level at the moment, it nevertheless has created some under-currents that might topple the government. The Hong Kong government has been facing several deep-level conflicts that have divided society, including: restructuring to a knowledge-based economy, which created unemployment; the government’s privatisation initiatives, which resulted in the reduction of social welfare and health care services, and the shifting of the financial burden to the general public; and the proposed legislation of the national security bill, which might endanger the basic freedoms and rights of

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citizens. Perhaps the most explosive issue is “democratisation” versus “mainlandisation”,  which stands for “a Chinese economic, ideological, judicial, and cultural hegemony at various levels of society, so that Hong Kong will ultimately be transformed into a Chinese society”. (Wong, 2006, p. 271). All of these deep-rooted conflicts could be easily exploited and manipulated under the disguise of the demand for more representative leaders and a more democratic government. Populism could be an attractive ideology to destabilise the government when society is suffering from intensive social and economic problems. The successful election of outspoken and radical politicians, such as Leung Kwok-hung and Wong Yuk-man, into the Legislative Council are signs that voters in Hong Kong prefer and accept political leaders who sternly challenge the government on every occasion, stand firmly on the side of the disadvantaged, insistently demand universal suffrage, and bravely adopt radical measures to oppose the government. The use of filibustering in the Legislative Council by Wong Yuk-man of the People’s Power in May 2012 to delay the legislation of the by-election bill was a case in point. Wong filed 1,306 amendments to the Legislative Council (Amendment) Bill 2012 which proposed to bar lawmakers who resign from standing in a by-election for six months to prevent a repetition of a “de facto referendum” on political reform when five pan-democrat legislators resigned in 2010 only to contest their same seats. Wong’s challenge led to 54 hours of debate and 55 hours in 8 days to vote down all the amendments. As a consequence, the many bills including the government restructuring bill could not be discussed during the 2011–12 legislative session. The existence of an adversarial executive–legislative relationship has led to the further disintegration of the political unity forged among such important political forces in Hong Kong as Chief Executive Tsang, the preds) o-Beijing DAB and Federation of Trade Unions (FTU), the pro-business Liberal Party, and the pan-democratic camp. As the Chief Executive does not have a ruling party in the Legislative Council, he has to rely on the support of the pro-establishment camp, namely the DAB, the FTU, and Liberal Party. Yet even the pro-establishment camp showed uneasiness with the Tsang administration as the pro-establishment camp lawmakers

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were angry at the government’s indecision, policy reversals, and lack of consultation. Cheng Yiu-tong, president of the FTU, criticised the Tsang administration for its repeated policy reversals which he said made it hard for allies to lend their support (South China Morning Post, 25 August 2011). Cheng said the Tsang administration failed to build sufficient trust with his political allies and did not do enough to consult them on key policies (ibid.). Citing the government’s reversal on its initial proposal to scrap Legislative Council by-elections, Cheng said officials were not good judges of public sentiment and that the government’s allies in the Legislative Council often learned of policy proposals just before their announcement. Cheng commented that “The government flip-flopped in the face public opposition. That made some pro-government lawmakers rethink their support for the Tsang administration in the future because they feel they end up to pay a heavy political price for their support”. (ibid.) The resentment of the pro-establishment camp was sparked off by the government’s sudden U-turn on launching a consultation on the scrapping of future Legislative Council by-elections for vacant seats (the government’s original position was that it was not necessary to hold public consultation). On 17 May 2011, some pro-establishment lawmakers said they were told of a proposal to scrap future Legislative Council byelections for vacant seats only hours before it was announced by the Secretary for Constitutional and Mainland Affairs Stephen Lam, while other lawmakers learned of it from the announcement. Three days after the 1 July march, which drew the largest turnout (about 218,000 people) since 2004, the government decided to delay voting in the legislature on an amendment to enact a ban on future Legislative Council by-elections. The announcement of a delay in voting was followed by launching a public consultation on the plan to scrap by-elections — a plan for which proestablishment lawmakers had earlier voiced support. The abrupt change of the government position embarrassed the pro-establishment lawmakers. Cheng said “the government has not done enough in building mutual trust with the government-friendly camp. It makes things difficult if they are not consulted during the policy-making process”. (ibid.) Representatives of the DABP and the FTU have seats on both the Executive and Legislative Councils, but some members have raised concerns about a lack of consultation in the early stages of policy formulation. As such, it was

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natural for some pro-establishment lawmakers to feel that they were not seriously respected by the Tsang administration. The Tsang administration faced difficulties in securing stable support from political allies, let alone the pan-democratic camp parties. Cheng described Alan Lee’s (a former National People’s Congress delegate and former chairman of the Liberal Party) proposal to form a coalition government comprising of politicians from pro-establishment and pan-democratic parties as too idealistic: “I think the pan-democrats are unwilling to join the governing coalition because they are happy with scoring points by attacking the government” (ibid.).

5. Conclusion The fragmented Legislative Council faced a further power shift, when 12 lawmakers announced on 21 August 2011 that they had formed a businessprofessional alliance to counter what they called rising radical and populist sentiments in society. The new power bloc had more legislative Council members than the DAB, consisting of three members from the Liberal Party, four members from Economic Synergy, four members from Professional Forum, and one independent. Lam Kin-fung, acting as the convenor, who said: “We believe most Hong Kong people want a stable society rather than growing populism and radical movements that make society more divided”. (South China Morning Post, 22 August 2011). Lam said the alliance came together because the members found common ground on social and economic issues. After the formation of the new power bloc, the Legislative Council had three major factions; the pan-democratic camp with 23 votes, the pro-Beijing camp (including the DAB and the FTU) with 14 votes, and the business-professional alliance with 12 votes. The implication of the creation of the new business-professional power bloc might be that it would introduce more elements of uncertainty and unpredictability into the legislative process. On the one hand, the government might find it easier to get support from the Legislative Council if the new power bloc was positive towards a government proposal. On the other hand, the result would be just the opposite if the new power bloc was

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negative towards a government proposal. Thus, the formation of a new power bloc with a certain degree of group unity among members in the Legislative Council was a double-edged sword for the administration. The adversarial executive–legislative relationship might get worse as there would be keen competition for power and influence among the key political players; namely the administration, the pro-Beijing DAB-FTU bloc, the pan-democratic camp, and the business-professional alliance. As there was no one who was in full control of the government, Hong Kong has experienced a power vacuum suffering from the political crises of legitimacy, stability, and integration. The adversarial executive–legislative relationship weakened the Tsang administration to the extent that Tsang led a lame-duck government during his two terms of leadership from 2005 to 2012. The Legislative Council was an   un-trustworthy friend, if not a hostile enemy, of Donald Tsang.

References   1. Ball, A. & Peters, G. (2005). Modern Politics & Government, New York: Palgrave.   2. Curtis, M. (1978). Comparative Government and Politics, New York: Harper & Row.   3. Haque, R. & Harrop, M. (2004). Political Science: A Comparative Introduction, New York: Palgrave.   4. Heywood, A. (2000). Key Concepts in Politics, New York: Palgrave.   5. King, A. (1975). “Administrative Absorption of Politics in Hong Kong: Emphasis on the Grass Roots Level”, Asian Survey, Vol. 15, No. 5, pp. 422–439.   6. Kuan, H. C. & Lau, S. K. (2002). “Political Learning and Elections in Hong Kong”, in Kuan, H. C. & Lau, S. K. (eds.), Out of the Shadow of 1997, Hong Kong: Chinese University Press.   7. Li, P. K. (2001). “The Executive–Legislative Relationship in Hong Kong: Evolution and Development”, in Cheng, J. (ed.) Political Development in the HKSAR, Hong Kong: City University of Hong Kong Press, pp. 85–100.   8. Loh, C. & Cullen, R. (2005). “Political Reforms in Hong Kong: The Principal Officials Accountability System”, Journal of Contemporary China, Vol. 14, February 2005, pp. 153–176.

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  9. Ma, N. (2002). “Executive–legislative Relations: Assessing Legislative Influence in an Executive Dominant System”, in Lau S. K. (ed.) The First Tung Chee-hwa Administration, Hong Kong: Chinese University Press. 10. Mezey, M. (1990). “Classifying Legislatures”, in Norton, P. (ed.), Legislatures, Oxford: Oxford University Press, pp. 149–176. 11. Miners, N. (1994). “The Transformation of the Hong Kong Legislative Council 1970–1994: from Consensus to Confrontation”, Asian Journal of Public Administration, Vol. 16, No. 2, pp. 224–248. 12. Piere, J. & Peters, G. (2000). Governance, Politics and the State, New York: St Martins. 13. Rhodes, R. (1996). “The New Governance: Governing without Government”, Political Studies, Vol. 44, pp. 652–667. 14. South China Morning Post, Hong Kong. 15. Synergynet (2012). An Assessment Report on the Governance of the HKSAR Government. 16. Tsang, D. (2005). Policy Address by the Chief Executive, Hong Kong: Government Printer. 17. Wong, B. (2006). “Mainlandization vs Democratization”, in Kuan, H. C. & Wong, T. (eds.), The 2004 Legislative Council Elections in Hong Kong, Hong Kong: Chinese University Press, pp. 241–273.

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C h a pt er 4

Structural Weakness of the Executive-led Model Governance and Party Politics of Hong Kong Chi-kit CHAN Secretary, SynergyNet

1. Introduction The legislature is the pivotal counter-balance to the power of the executive branch. Lawmakers vet the proposed bills, question officials over significant public matters and hold the administration accountable through investigations, testimonies and probes. Therefore in non-democratic regimes and under-developed democracies the authority of parliament is usually either substantially constrained or reduced to ceremonial rituals. Keeping lawmakers at arm’s length to constitutional power, so to speak, ideally should ensure stable governance in the narrow sense of administrative efficiency with regard to legislative procedure and policy initiatives. The above-mentioned rationale is, to a certain extent, reflected in the Basic Law of the Hong Kong Special Administrative Region (HKSAR). The capacity of the lawmaking institution is effectively constrained, if not partially removed. Lawmakers returned by direct election make up just half of the members of the lawmaking body, so that the democrats — those who are not considered “patriotic” enough by China — have little hope of forming the majority in the Legislative Council, despite their edge in

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popular elections. This institutional framework could be termed as the executive-led model — offering constitutional advantages to the executive branch and, ideally, ensuring a less tumultuous political environment for the HKSAR government. The performance and political challenges faced by Donald Tsang’s administration, however, pose a valid question to the rationale above. The constitutional advantages of the executive-led model do not guarantee executive-led governance. The unintended consequences of this political system result in distorted party politics, whose impact is to weaken instead of strengthen the governing capacity of the HKSAR government. After all, organic bonding between leadership of the executive branch and political parties from the legislature is a much-needed condition for effective governance. Curbing the constitutional power of the legislature is not the proper way to secure governing capacity.

2. Basic Law and Executive-led Governance When the former Crown colony transformed to a Special Administrative Region of the People’s Republic of China (PRC) in 1997, the Basic Law became the mini-constitution of the territory, which laid down the constitutional framework and stipulations concerning its democratisation. Although universal suffrages for the Chief Executive (the head of the HKSAR government) and the Legislative Council are decent promises enshrined in Article 45 and 68 of the Basic Law respectively, a closer scrutiny reveals the constitutional power of the latter is subject to noteworthy limitations: 1. Article 74 (excerpt): Bills not related to public expenditure or political structure or the operation of the government may be introduced individually or jointly by members of the Council. The written consent of the Chief Executive shall be required before bills relating to government policies are introduced. 2. Annex II (II): Unless otherwise provided for in this Law [Basic Law], the Legislative Council shall adopt the following procedures for voting on bills and motions: the passage of bills

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introduced by the government shall require at least a simple majority vote of the members of the Legislative Council present. The passage of motions,[1] bills or amendments to government bills introduced by individual members of the Legislative Council shall require a simple majority vote of each of the two groups of members present: members returned by functional constituencies and those returned by geographical constituencies through direct elections and by the Election Committee.[2] Article 74 of the Basic Law renders the capacity of lawmakers to introduce private bills largely defunct. Legislative initiations from the members of the Legislative Council are predominantly subject to the discretion exercised by the head of the government, as bills without any possible implication for public expenditure, political structure and the operation of the government are usually hardly significant, if not negligible to the public. According to SynergyNet, an independent public policy think tank in Hong Kong, there were only nine private bills throughout the third term of the Legislative Council (2004–08), and none for next two legislative years (2008–10) (SynergyNet, 2008; 2009; 2010a). In addition, these legislative initiatives of lawmakers were bills primarily of limited public interest and social ramification in general: modification of the logo of a business chamber, the legal technicality for a local university to set up new colleges, in-house managerial re-structuring of educational institutes and corporate bodies (SynergyNet, 2008, p. 61). By no means would the author demean the functions of the aforesaid private bills, yet should the lawmaking capacity of lawmakers go further if dispensing proactive efforts pertaining to significant agendas and profound reforms is the social role of the Legislative Council? Moreover, initiatives by members of the Legislative Council are also at the mercy of the “split voting system” designated in Annex II of the Basic Law. Since 2004, members of the Legislative Council have been returned

1. A motion is the proposed stance of the Legislative Council raised by lawmakers in a motion debate. It is the way for lawmakers to kick-start deliberation upon significant social agendas. The passage of motions refers to the endorsement of the Legislative Council of that stance or position. 2. The Election Committee was a kind of coterie election among a group of social elites from various sectors. It ceased to exist from the election of the Legislative Council in 2004.

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by two ways: half of them are by direct election according to geographical location (geographical constituency), the other half by elections of a limited franchise based on specific occupations, professional status and membership of chartered bodies or organisations (functional constituency), whose voters consist of no more than 5% of the population).[3] Initiatives by lawmakers, including private bills, motions and amendments to government bills, are required to get a pass in both geographical and functional constituencies. This procedure is not applicable to the initiatives of the government, which can be endorsed by the simple majority vote of all members present. This “split voting system” ironically results in the “veto power of the minority”, as the initiatives of lawmakers will be quashed once they fail to secure the support of a simple majority in either the geographical or functional constituency members, despite it could be the majority view of the Legislative Council. This irony is particularly controversial to the functional constituencies, whose franchise is much more restrained and exclusive than those legislators returned by direct election. In the third term of the Legislative Council (2004–08), 27 out of 229 motions raised by lawmakers were discarded owing to the above-mentioned scenario, and 6 out of 117 motions for the legislative year of 2008 to 2010 (SynergyNet, 2010a, p. 13). The proportion is not stunning, but the motions concerned were primarily those covering sensitive political issues (for example, the 4 June incident and constitutional reform for democratisation) and having implications for the interests of business and industrial sectors (for instance, assisting grassroots workers in economic adversity by measures, including the implementation of a collective negotiation mechanism

3. The present election system of functional constituencies has been adopted since the first term of the post-handover Legislative Council. In June 2010, however, a constitutional reform package was passed by the Legislative Council, which was later approved by the central government of the PRC. Five additional seats will be allocated to both of the geographical and functional constituency from 2012, yet for the part of the functional constituency, those five seats will be nominated by incumbent district councilors, but elected by all registered voters who do not have voting rights in other functional constituencies. The franchise of functional constituency as a whole will thus be enlarged significantly for the election of the Legislative Council in 2012. Having said that, the traditional functional constituencies other than the additional seats of the constitutional reform of 2012, are still widely regarded as coterie election with restrained and exclusive franchise.

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between employers and employees; and reviewing stipulations with regard to compensation to employees owing to industrial accidents). The exercise of “veto power” by lawmakers of functional constituencies against the majority view of the Legislative Council, albeit far from being frequently abused, unequivocally jeopardises the legitimacy of the legislation in terms of representing general public opinion and deliberation on significant policies. Nonetheless, the Legislative Council of Hong Kong is definitely not a rubber stamp. Lawmakers continue monitoring and investigating the administration from time to time. Beneath the vocal criticisms and whiteheat debates in the chamber, one should nevertheless be mindful that the capacity of the lawmaking institution is effectively constrained, if not partially removed. The delicate constitutional design of the Basic Law is primarily for facilitating executive-led governance. Firstly, lawmakers and their political parties are substantially restrained from proactively institutionalising their agendas into legislative initiatives (limitations imposed by Article 74 of the Basic Law, for instance), hence reducing political challenges against the executive branch. Secondly, since legislative initiatives are largely in the hand of the government rather than lawmakers, the executive branch has the upper hand in respect of policy making, reform and legislative procedures. Parties and individual members of the Legislative Council are certainly involved in the vetting process and deliberation on legislation, yet institutionally they cannot get the ball rolling if the administration insists on holding up the initiatives. The constitutional advantage of the executive branch is coupled with the formation of a de facto alliance between the HKSAR government and a “pro-establishment” camp in the Legislative Council (Chan, 1997). “Pro-establishment” camp is a general concept associating the pro-Beijing parties and organisations, and groups representing the business sector and professional bodies in the Legislative Council. Since the handover of Hong Kong to China, the democratic camp consisting of democrats and social activists has repeatedly failed to obtain a simple majority in the Legislative Council by election, thanks to the constitutional arrangement of functional constituencies whose seats are largely in the hands of the “pro-establishment” camp. Voting patterns from legislative year of 2004 to

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2009 demonstrate that the “pro-establishment” camp has been the stable source of supporting votes for government bills and funding applications submitted to the Legislative Council (SynergyNet, 2008; 2009). The alliance basically does not stem from similar political beliefs and mutual trust, but rather originates from strategic need out of common favours and swapping of interests (Chan, 2007), and in general it garners the government as a key source of back-up in the Legislative Council.

3. Tsang Administration —  Cracks in Executive-led Governance? Donald Tsang succeeded C. H. Tung as the Chief Executive of Hong Kong in mid-2005 when the latter resigned from office on the grounds of health problems. After accomplishing the remaining tenure of Tung, Tsang became the third Chief Executive of Hong Kong in 2007 with a fiveyear term. As discussed in previous paragraphs, the Tsang administration inherited the constitutional advantages of executive-led institutional design enshrined in the Basic Law, and the cordial understanding between the “pro-establishment” camp in the Legislative Council and the government. Tsang was a veteran in public service, who had been serving the government for decades since the colonial era of Hong Kong, with experience of various important postings ranging from the Financial Secretary (equivalent to minister of finance) to the Chief Secretary (the de facto deputy head of the HKSAR government). It is groundless to question Tsang’s knowledge and training in public administration and politics of Hong Kong. Given the edge of the executive-led institutional design, the prevailing existence of “pro-establishment” camp in the Legislative Council and the credentials of Donald Tsang himself, the executiveled governance should have been maintained, if not further strengthened during the Tsang’s era. Executive-led governance should be reflected by responsive and proactive policy initiatives of the government, since institutional challenges from the legislature are supposed to be restrained. The rest of this chapter, however, is going to show that the rationale of executive-led governance did not synchronise with the performance of the Tsang administration.

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4. Who Fooled Donald Tsang? On 14 January 2011, the financial committee of the Legislative Council rejected a funding application of HK$6 billion proposed by the government to host the Asian Games in 2023. A striking feature of this voting is that the Democratic Alliance for the Betterment of Hong Kong (DAB), a major pro-Beijing political party, joined the democrats, resulting in a 40-to-14 voting margin against the government proposal. The move of DAB was not a surprise to the public, as it had been openly defying the government’s intention to apply to host the Asian Games shortly after the launching of a consultation exercise in the September of 2010. What caught widespread curiosity among the people of Hong Kong was, however, the unusual rhetoric of the Chief Executive Donald Tsang on 13 January 2011, a day before the rejection of the funding application, when he attended a general meeting of the Legislative Council. Donald Tsang was questioned by lawmakers about the official proposal to host the Asian Games, his answer raised a lot more questions for the public: “… we have been ‘fooled’ (跣低) during the process [of applying to host the Asian Games], with our back being probed with holes, just as when we saw our athletes continued to race even after falling to the ground from her bicycle, and with her ribs broken owing to being pressed by other bicycles, I and my colleagues will go on, hoping our legislators can be convinced at the last minute, so as to treat this issue (applying to host the Asian Games) in a far-sighted way during the voting session tomorrow. I think maybe it is time to leave out prejudice when dealing with this issue”.[4] Tsang solicited the experience of a Hong Kong athlete during the Asian Games organised by Guangzhou in November 2010 as a metaphor for the government’s determination to apply to host the same event in 2023. What stimulated rampant public speculation was not this metaphor, nor if Tsang could turn the tide, as the public widely believed that the government was going to lose this time, owing to DAB’s early disapproval of the official plan. What the public eagerly questioned afterwards was: Who fooled

4. “Zeng Yin Quan Bu Man Shen Ya Bei Ren Xian Bu Dian Ming Pi Min Jian Lian Tan Yao Zong Zhi Min Qing You Bian”, Sing Tao Daily, 14 January 2011, A12.

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Donald Tsang? Who had probed the back of the government? In the Chinese saying, probing somebody’s back refers to badmouthing. Tsang’s rhetoric had left the public plenty of room for imagination about the story behind the bid to host the Asian Games 2023, particularly the relationship between the government and its perceived strong alliance with the DAB. What had happened to them in this fiasco? It is a usual business for the democrats to go against the government, but open defiance and public embarrassment from the pro-Beijing party DAB against the HKSAR government was far from general anticipation. Therefore DAB was soon identified as the party who allegedly “fooled” Tsang and badmouthed the government over the application to host the Asian Games.[5] DAB quickly denied the speculation,[6] and Donald Tsang also telephoned DAB members to clarify the “rumour”.[7] The saga however did not come to an end there. DAB was reported for “badmouthing” the Tsang administration again in front of the Director of the Office of Hong Kong and Macau Affairs, the official of the central government of China who is responsible for overseeing Hong Kong.[8] The fiasco of applying to host Asian Games by Hong Kong illustrated a bitter experience to the perceived cohesiveness between the “proestablishment” camp and the HKSAR government. DAB has chosen a different line to take from another key group of pro-Beijing camp, the Federation of Trade Unions (FTU), who eventually supported the official funding application. Moreover, the official who was in charge of this plan, Tsang Tak-shing, the Secretary for Home Affairs, was a founding member of DAB and also the brother of Tsang Yok-shing, the chair of the Legislative Council as well as a prominent leader of DAB. Given such connection, still the government lost DAB’s understanding. Worse still, DAB was the first political party who voiced against government’s idea to host Asian Games, even earlier than the oppositional stances shown by the

5. See footnote 4. 6. “An Cun Bei Min Jian Lian Xian Te Shou Ban Shan Re Huo Zi Yan”, Hong Kong Economic Journal, 14 January 2011, p. 20.   7. “Li Hui Fou Jue Bo Kuan Xiang Gang Shen Ya Meng Sui 40:14 Ya Dao Piao Shu Fan Dui Zheng Fu Zhong Shen Jian Ding Fa Zhan Ti Yu ”, Wen Hui Pao, 15 January 2011, A02.    8. “Chen Jian Lin Gao Yu Zhuang Pi Shen Ya Yi Xiang Qing Yuan”, Ming Pao, 17 January 2011, A05.

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democrats, albeit it was exactly the same political party to push through a motion in the Legislative Council, urging HKSAR government to “actively consider bidding to host the 18th Asian Games in 2019” on 6 January 2010.[9] For the change of stance with regard to bidding to host Asian Games and open defiance against the government’s plan, DAB attributed to the changing public opinion concerning the issue.[10] Nevertheless, this saga was illustrative for two reasons: Firstly, mutual trust between the HKSAR government and the proestablishment camp may not be as robust as perceived. Although in general the pro-establishment camp still provides the government a comparatively stable source of support in the Legislative Council than the democrats, their working relationship was basically a strategic contingency out of mutual interest from time to time, issue by issue, rather than ideological bulwark originating from political struggles and nurturing. The idea of hosting Asian Games was initially proposed by DAB at the very first beginning, but later on when the government materialised this vision into action plan, DAB apparently took an off-handed manner, stayed away from the government. DAB complained that the government had never genuinely consulted them, and got DAB involved in the drafting of action plan, and thus should not take DAB’s back-up for granted.[11] The open exchange of unfriendly rhetoric indicated mutual mistrust and grievances between the government and DAB behind the façade of perceived alliance. If DAB’s charges against the government were presumably the facts, then even the long-standing proBeijing group owing the largest number of seats in the Legislative Council could hardly be the genuine and trustworthy alliance to the government, not to mention other pro-establishment groups or individuals with less significant political influence. Secondly, the robustness of the governing alliance between the HKSAR government and pro-establishment camp is further strained by the internal

  9. Document of the Legislative Council: LC Paper No. CB(3) 283/09-10. 10. See footnote 6. 11. See footnote 8.

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strife of the camp itself. Members of pro-establishment camp voted differently with regard to government’s application for fund bidding to host Asian Games. While DAB said no, the other veteran pro-Beijing group FTU said yes. Voting pattern of the business and industrial groups, which are also widely regarded as members of pro-establishment camp, also indicated a scattered picture: Liberal Party said no, while Economic Synergy and Professionals Forum said yes.[12] Indeed, a lawmaker from FTU even mocked at DAB when asked about the issue: “Smart people go against the application for hosting Asian Games, FTU is too stupid, therefore we will go on to support [the government]”.[13] With divided and scattered interests of various, the pro-establishment camp is far from a united front. Efforts and concessions made by HKSAR government to secure enough votes in the Legislative Council from time to time should not be underestimated.

5. Internal Strife of Pro-establishment Camp Inconsistent voting pattern within pro-establishment camp is not out of the blue. In spite of constitutional advantages, garnering simple majority in the Legislative Council still is much needed to put forward policy initiatives, therefore the robustness of her alliance with “pro-establishment” camp becomes crucial for the government to leverage administrative and financial measures. To Beijing, the “pro-establishment” camp can serve as political buffer against the democrats, who are not likely be regarded by the central government of China as appropriate candidates to be in charge of the governance of Hong Kong. This political safety net to Beijing, however, to a certain extent bets the governing capacity of HKSAR government on the allegiance and coherence “pro-establishment” camp. Once “pro-establishment” camp suffers from internal strife, or, so to speak, becomes more “naughty” to the administration, difficulties for the government to put forward policy initiatives will be apparent. Since the

12. See footnote 7. 13. See footnote 6.

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curbing of lawmaking capacity of legislators has left the executive branch as the main engine of policy and legislative initiatives of Hong Kong, the aforesaid scenario is not desirable to the governance quality. Exchange of political spats among democrats is not rare in the public discourse of Hong Kong, and has become more intense since the debates concerning the constitutional reform in 2010.[14] Despite relatively less covered by media reportage, internal strife of “proestablishment” camp is indeed no less severe than those of the democrats. Table 4.1 captured the major voting pattern of various political camps in the Legislative Council. Lawmakers of key political parties and groups were categorised in accordance to their general political stances. Since 42 out of 60 legislators were included, the data is thus illustrative of the partisan dynamics in general. Motion debates are deliberation of lawmakers upon significant social issues. Voting stances of lawmakers in respect of motions therefore largely indicate the cohesiveness of parties or groups which are supposed to be in the same political camp. “Pro-establishment” camp, in this regard, was not a more coherent front than the democrats, particularly for the business and professionals groups who disagreed with each other on roughly one out of five voting sessions of motions. Cohesiveness among the two key pro-Beijing political organisations, namely Democratic Alliance for the Betterment of Hong Kong (DAB) and Federal of Trade Unions (FTU), was not impressive when comparing to those of the conflict-ridden democrats. Furthermore, a closer scrutiny revealed a striking observation: DAB and FTU disagreed with each other for 27.4% of voting sessions of bills for legislative year of 2009–10. This percentage was extraordinary

14. The democrats even went through a traumatic internal strife recently. In early 2010, radicals and Young Turks attacked the “mainstream fraction” of Democratic Party for not joining the quasireferendum, which was initiated by the resignation of five lawmakers from the Civic Party and League of Social Democrats and the subsequent by-election as political gesture demonstrating public opinion for universal suffrages. The passage of constitutional reform package in June 2010 with regard to election methods for the Chief Executive and the Legislative Council in 2012 further aggravated the contest between the radical and moderate democrats. Democratic Party lost lawmaker Albert Cheng Kar-foo, who refused to give a pass to the constitutional reform package and quitted the party, and later on more party members withdrew their allegiance. On the other hand, radical democrats and hardliners vowed to get the moderate democrats down in the upcoming elections.

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Table 4.1 Voting Patterns of Democrats, Pro-Beijing, Business and Professionals Camp* 2008–09

2009–10

Inconsistent Voting Pattern of Motions (%)

Inconsistent Voting Pattern of Motions (%)

Inconsistent Voting Pattern of Bills (%)

Democrats (18 lawmakers)

14.98%

13.86%

16.44%

Pro-Beijing (13 lawmakers)

12.33%

12.44%

27.40%

Business and Professionals Groups (11 lawmakers)

22.47%

18.18%

8.22%

Camps#

* SynergyNet, 2010a: 18–19. Whenever lawmakers of the camp voted for different stances, that voting session would be counted as inconsistent voting pattern of that camp. # Democrats: Democratic Party, Civic Party, League of Social Democrats, Alliance for Democracy and People’s Livelihood/Pro-Beijing camp: Democratic Alliance for the Betterment of Hong Kong, Federal of Trade Unions/Business and Professionals groups: Liberal Party, Economic Synergy, Professionals Forum.

high when comparing to those of the democrats and business and professionals groups. Indeed, the bill of minimum wage was deliberated in that legislative year, and it was the primary reason for antagonism between DAB and FTU: the latter supported numerous amendments from democrats, which were largely rejected by the former (SynergyNet, 2010a, pp. 27–28). “Pro-establishment” camp, after all, is expedient alignment out of Beijing’s hostility against local democrats, instead of alliance stemming from common believe and political upbringing. Parties and groups comprised in “pro-establishment” camp range from various social strata and sectors, whose interests and views could hardly be easily compromised. While DAB attempted to secure supports from different

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classes, FTU is wholly rooted in grassroots. Therefore incentive for FTU to be more vocal and even defiant on issues of unionist right, such as bill of minimum wage is understandable. On the other hand, groups with business and professional backgrounds could also be fraught with confrontational moments. Liberal Party, which used to be the largest political party representing the business and professional sectors, suffered from serious internal strife in 2008. After losing two seats of geographical constituencies in the Legislative Council election that year, four lawmakers from functional constituencies quitted the Liberal Party upon exchanges of harsh rhetoric among the party leaders (these four legislators formed the group called “Economic Synergy” later on). “Pro-establishment” camp is certainly not meaningless to the central government of China. Beijing still can effectively secure their allegiance and compliance during “critical moments”, such as the passage of constitutional reform package in June 2010. Moreover, upon voting sessions involving the integrity or designated projects of the central government, for instance, motion debate about 4 June incident, and the official funding application for the Guangzhou-Shenzhen-Hong Kong Express Railway Link in early 2010, lawmakers of “pro-establishment” camp also seldom defied the official stance or took side with the democrats. However, the governance of Hong Kong should not and cannot count on the reining in of “pro-establishment” camp by Beijing upon “critical moments”. Given the rampant strife among parties, groups and individual lawmaker within “pro-establishment” camp, challenge for HKSAR government to steer their common interest and collective stand is likely to be a tremendous one. In fact, some lawmakers or groups of “proestablishment” camp even cooperated with the democrats on issues of social problems and people’s livelihood (SynergyNet, 2008). On the other hand, lingered open defiance between the administration and different groups of “pro-establishment” camp is unfolding in recent years, a typical example was the official consultation exercise with regard to applying the hosting of 2023 Asian Game: DAB, the largest pro-Beijing political party, is one of the political parties which immediately voiced against the bid when official proposal was unveiled in 2010.

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6. Fragile Alliance and Governance Quality The contingent front between the HKSAR government and proestablishment camp relies on interest swapping from time to time, coupled with the internal strife of the pro-establishment itself contribute to an undesirable scenario for the governance of Hong Kong. The façade of stable support from the pro-establishment camp to get the official policy initiatives through in the legislature is in fact fraught with undercurrent of instrumental calculation and trading of concessions instead of common political ideology and visions. Political deals out of negotiation are no strangers to any governments and politicians, yet without any strings of bonding originated from partisan alliance, or at least an effective governing coalition between the executive and legislative branches, long-terms policy plans and ambitious goals targeting at deep-rooted social problems could hardly be materialised. A contingent political front counting merely on trading of interests for each of the policy initiative and voting session is too fragile to stand against the stress of persistent political challenges from the public and internal strife among various fractions and sectors. DAB’s withdrawal of support to government’s plan to bid the hosting of Asian Games owing to unfavourable public opinion was a typical example. Another illustrative fiasco experienced by the government was the public outcry concerning the government budget for the year of 2011–12. On 23 February 2011, Financial Secretary John Tsang unveiled the government budget for the year of 2011–12. The newly released budget soon turned the financial minister a detestable name in Hong Kong: criticisms aroused from all corners, bombarding the government for not properly managing the excessive surplus of HK$71.3 billion to kick-start long-term policy initiatives in view of seething social resentment resulting from widening wealth gap, skyrocketing property price, imminent inflation, universal social pension scheme meeting aging population, etc. In addition, rampant discontent was also eyeing on the huge fiscal surplus and smashing the government for not initiating tax rebate. Politicians and business leaders condemned the budget as the worst one they had ever heard; the harsh comment also yielded corresponding evidence from the poll which indicated the budget only scored 51.5 marks, which was

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the lowest among the four budgets proposed by John Tsang.[15] Donald Tsang administration was therefore mocked as a lame-duck waiting for the end of its tenure, for its sluggish performance before mounting social demands, which was far from meeting keen public expectation to the much-anticipated plans with regard to structural social reforms.[16] In view of the roaring public outcry, neither individual politicians nor political groups dared to stand next to Donald Tsang administration. Joined by unions of teachers and civil servants, democrats called for a massive demonstration and named the event as “Bauhinia Revolution”, a term which was reminiscent of the “Jasmine Revolution” sweeping through North Africa and Middle East at that moment to articulate their anger and grievances against the government budget.[17] A further blow to government’s morale was democrats worked hand-in-hand with a significant number of pro-establishment political parties and lawmakers to press for government’s concessions and revision to the budget.[18] Imminent massive rally, endless criticisms, united front of lawmaker urging for revising the budget, Donald Tsang administration lost all political allies overnight. John Tsang kept insisting on there were no rooms even for fine-tuning of the government budget, yet his words became pale after meeting up with pro-establishment legislators, and announced the revamping of one of the policy initiatives: instead of giving all accounts of Mandatory Provident Fund (MPF, mandatory saving accounts for all working population of Hong Kong) HK$6,000, the government will offer exact amount of money to all permanent Hong Kong residents who are 18 or above.[19] The swerving position of the government could regain

15. “Zheng Dang Hong Ban Tui Xiu Cai Ye Bo Cheng Jin Qu”. Ming Pao, 24 February 2011, A05. 16. Editorial of Ming Pao, 23 February 2011. 17. “Cai An Shi Min Xin Xian Zi Jing Hua Ge Ming Zheng Dang Yu Shi Ba Wan Jiao Shi Gong Wu Yuan San Yue Liu Ri Shang Jie”. Ming Pao, 25 February 2011, A02 and “Zheng Fu Jiu Huo Jiao Shi Huo Zhu Zhi Chang Feng Gong Wu Yuan Reng Wu Fen Du Cha Hui Ni Xiang Ying Zi Jing Hua Ge Ming”, Ming Pao, 26 February 2011, A01. 18. “Fan Min Jian Zhi Lian Shou Bi Xiu Ding”. Ming Pao, 25 February 2011, A02. 19. “Fan Ming Zhou Er Wu Cai Ye Cu Ming Shang Jie Zao Shi”. Ming Pao, 5 March 2011, A04.

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the support of pro-establishment legislators, but democrats, prominent scholars, social welfare practitioners and former top officials continued to condemned the government for pacifying public discontent by the reckless move of pouring public money out rather than formulating considerable policy initiatives,[20] some even stepped up and called for the resignation of John Tsang from his office.[21] The fiasco of the budget did not only once again demonstrate the policy quality of HKSAR government, but also the fragile liaison and political bonding between Donald Tsang administration and the proestablishment camp. Government’s credibility was severely jeopardised when it openly changed its mind from standing firm on the original budget to later on expressing possibility to make concessions during the course of negotiating with the pro-establishment camp. As duly pinpointed by Ma Ngok and Ivan Choy, the swerving position of the government put a big question mark to public confidence to the Executive-led governing model, stirring up inquires of whether the government was keening for votes by making concessions once it faced up with unfavourable tide in the legislature.[22] Ma and Choy further suggested that given the dampening prestige of Tsang administration, pro-establishment camp may not offer their back-up to official initiatives easily in the future.[23] The budgetary fiasco was a vivid illustration to how governance quality could be adversely reduced to expediency and keen-jerk response out of political controversies and public outcry, owing to the lacking of partisan support. In the first place, the clean-handed manner of pro-establishment camp legislators after the outbreak of public anger against the budget, once again, brought the fragile cordial understanding among Donald Tsang administration, pro-Beijing parties and pro-business groups of the

20. “He Zhi Ping zhi Kai Huai Li Wei Lai Zheng Ce Zi Xun Nan”. Ming Pao, 5 March 2011, A04; “San Qian Gao Guan Hen Pi Luan Pai Qian Chen Tai: Yi Cuo Zai Cuo Xiao Guan Zhi Wei Xin”, Ming Pao, 7 March 2011, A02. Also see footnote 19. 21. “Zhou Yong Xin Cu Zeng Jun Hua Wen Ze Xia Tai”. Ming Pao, 5 March 2011, A04. 22. “Xue Jie Pi Bu Gou Piao Ji Gui Di Xing Zheng Zhu Dao Dang Ran Wu Cun”. Ming Pao, 1 March 2011, A02. Also see editorial of Ming Pao, 3 March 2011. 23. Ibid.

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legislature under public spotlight. As mentioned in aforesaid paragraphs, a number of legislators from pro-establishment camp joined the democrats to press for government’s concessions. Their move had two possible implications: either their views had not been fully regarded and reflected in the government budget so that they did not feel obligated to defend for the official lines, or the huge public outcry and persistent criticisms scared the allies of the government to stay away from the controversy, some even turning to democrats (albeit temporary). Nonetheless, both possible explanations explicated an appalling political trouble: HKSAR government has no effective means to consolidate solid ruling allies. Expedient deals out of the trading between official concessions and voting support in the legislature from time to time have left the government neither any heartfelt political buddies in the legislature who could be entrusted by including them in the policy formulation processes, nor reliable partners who could be counted on in times of political troubles and public crises. Without sharing the same sense of belonging to a political party, common ideologies and policy visions originated from partisan loyalty, asking the principal officials, official bureaucrats and lawmakers representing various sectors, social strata and interests to form a coherent governing front is tremendously challenging. Secondly, the way that Donald Tsang administration handled the budgetary fiasco has aggravated instead of restored its credibility. The government’s decision to offer all permanent Hong Kong residents who is 18 or above a cash allowance of HK$6,000 has no implications to any kinds of policy initiatives with regard to social problems, no matter structural or immediate. It did not only refute John Tsang’s own initial insistence on the avoidance of giving out public money so as to prevent from further stimulating inflation, but also paved the way for the subsequent social outcry and controversies wrestling on whether the new immigrants from the Mainland should be entitled with the cash allowance or not. General emotional hatred of the locals against the new immigrants was lighted up again; exchanges of harsh rhetoric were flooded in online social networks. If justifications had to be solicited for the government’s move, the only one was the “revised” budget could regain the voting support of

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the pro-establishment camp, which was utmost important to Donald Tsang administration at that moment. In accordance with Articles 50 and 52 of the Basic Law, failure to get important government bills through the legislature, including the budget will result in serious political consequence. If consensus still cannot be reached between the government and the legislature after consultation, the Chief Executive may dissolve the Legislative Council; but if the re-elected legislature is still not able to pass that important bill or the budget, then the Chief Executive must resign. Therefore, if HKSAR government failed to get the budget passed in the legislature, this certainly would have been an unprecedented political crisis since the handover of Hong Kong in 1997, a highly uncertain and unbearable risk in which too costly for Donald Tsang administration to afford. Hence, regaining the voting support of pro-establishment camp became the top agenda of HKSAR government to refrain from stepping in such political quagmire. To regain the votes of pro-establishment camp was not easy, thus the HK$6,000 cash allowance was a stop-gap yet highly strategic move of HKSAR government: to pacify public anger by taking advantage of the affluent public coffer. Albeit controversial, the distribution of windfall was still an effective expediency to make rooms for legislators of proestablishment camp to come back, particularly the windfall was announced after meetings with top government officials which were exclusively for pro-establishment camp,[24] so that the latter can “claim public credit” of successfully persuading the government to make “generous” concessions. Although the budget was eventually passed by the legislature a month later, ushered by legislators of pro-establishment again, the troubles arising from the budget controversy has left difficult legacies rather than fixing the issue. The most troubling one to governing quality onwards is, given the dampening prestige of Donald Tsang administration, pro-establishment camp may not offer their back-up to official initiatives easily in the future. The budgetary fiasco fully demonstrated the bargaining power of proestablishment camp to the political stability of HKSAR government,

24. See footnote 19 and 22.

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particularly in times of imminent public crises. Although in general proestablishment camp is still a key source for the government to garner support in the legislature to get the bills and funding application through, this kind of instrumental support is far from easily maintained. Donald Tsang administration has to take a swerving-revision to its own budget, sacrificing its own prestige and credibility in order to make rooms for regaining the support of pro-establishment camp in the budgetary fiasco. The effort of HKSAR government to maintain the general support of proestablishment camp upon the internal strife of the latter could be troubling to long-term policy initiatives, as any moves which are controversial might be easily “traded away” owing to government’s limited capacity to stand against the political troubles resulting from defying manners of legislators from pro-establishment camp. Unfortunately, this daunting situation seems not likely an exceptional case for budgetary fiasco, but also the overall performance of Donald Tsang administration.

7. Avoiding Controversies? Table 4.2 summarised and classified the public consultation documents issued by Tsang administration, the bills listed in the “Legislative Programmes” (a document submitted by the government to the Legislative Council advising the law bills will be tabled in the upcoming legislative year) and passed by the Legislative Council, and the allocation of public expenditure from 2007–10 in accordance with their policy areas. Consultation documents, Legislative Programmes and public expenditure are indicators illustrative of policy agendas and concerning administrative or financial initiatives delivered by the government. Since his assumption to the third Chief Executive of Hong Kong, Donald Tsang administration has been focusing administrative and legislative initiatives on the policy areas of economy and quality of life. A striking observation is, policy initiatives for social welfare and people’s livelihood and education were so far quite limited (as indicated by the percentage of consultation documents and bills of the Legislative Programmes passed), yet financial allocation in these two policy areas

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Table 4.2 Policy Agenda of the Donald Tsang Administration (2007–10) No. of public consultation documents issued (%)

No. of bills passed (%)

Allocation of public expenditure (%)

10 (17.54%)

3 (8.57%)

11.77%

Laws and judiciary

9 (15.79%)

4 (11.43%)

9.7%

Economy

18 (31.58%)

12 (34.29%)

6.43%

Social welfare and people’s livelihood

3 (5.26%)

3 (8.57%)

30.63%

Infrastructure and community development

6 (10.53%)

6 (17.14%)

16.07%

Quality of life

11 (19.3%)

6 (17.14%)

4.3%

0 (0%)

1 (2.86%)

21.1%

Policy area

Constitutional affairs and governmental support works

Education

Source: SynergyNet (2010b), pp. 28–29.

was particularly generous. Social welfare and education are unequivocally significant policy matters, their impressive shares in the overall public expenditure can be justified by mounting social demands for improving people’s livelihood. However, limited policy initiatives in these two policy areas could hardly be regarded as meeting public expectations: calls for full-scale implementation of small-class education, policy formation relating to long-term social pension scheme, for examples, have been vocal agendas from the civil society for years. From Table 4.2, it seemed that Tsang administration attempted to pacify the mounting social demands with regard to social welfare and education policies by resource allocation rather than administrative or legislative initiatives. Effort to

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examine public opinion on these matters via consultation exercise was also minimal. Apart from Education bureau, Civil Service bureau also has issued no consultation documents since Tsang assumed to the third Chief Executive of Hong Kong (SynergyNet, 2010b, p. 13). In early post-handover period, reform of re-structuring the public sector used to be one of the top agendas set out by the government for years, despite relevant initiatives resulted in political controversies and disputes. Public sector reform nevertheless has ceased to be a concern of the government during Tsang’s tenure, with no official reviews on the effectiveness of previous reform measures, nor any conclusive remarks indicating whether the reform was accomplished or not. Putting policy initiatives into a halt is even more illustrative when examining the legislative proceeding of Tsang administration: from legislative year of 2005–10, on average over 30% of government bills included in the Legislative Programme was either shelved or postponed by the government herself before tabling to the lawmakers (SynergyNet, 2010b, p. 11). Performance of Tsang administration has inferred a paradox: whether executive-led constitutional design can necessarily bring forward an executive-friendly political environment for the administration should be questioned. Policy initiatives of Tsang administration, generally speaking, are prudent and even vulnerable to political controversies. Issues incurred crashes of social values (for example, the public sector reform involved whether yardsticks of efficiency and cost-control should be substantially applied to the public service sector, particularly for the management of human resources; universal pension scheme is another contested issue, since policy of mandatory contribution is extremely antagonising and confrontational), conflict of interests incurring complicated portfolio of stakeholders (education reform for instance, could sensitively stir up vocal feedbacks from educational institutes at various levels, parents groups, professional teaching bodies, etc.) quite often were either postponed or proceeded with minimum policy initiatives. Conversely, proactive measures were introduced for policies whose public debates primarily addressing on implementation rather than fundamental justification. People would seldom argue against fostering Renminbi business in Hong Kong, consolidating Hong Kong as a global financial hub, improving air

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quality, reducing the volume of urban garbage. What matter most to the public discourse concerning the above policies of economy and quality of life very often is how to do, instead of whether should we do. All governments count on public opinion and political tactfulness. However, given the executive-led constitutional design of Hong Kong, Tsang administration ideally should be in a better position to exercise institutional advantages so as to combat political challenges. The government only needs a simple majority of the Legislative Council to get her bills through, while initiatives of lawmakers or their parties/groups have to tackle with the “split voting system”. “Pro-establishment” camp has long been the majority of the Legislative Council, while the “noisy” democrats and activists are far from acquiring effective control over the legislature, owing to the presence of functional constituencies. Tsang administration has no excuses to articulate the prudent policy initiatives to its underdog position in the existing constitutional and political framework.

8. Party Politics and Governance A possible explication to observations above is the unsatisfactory policy quality of Tsang administration. In addition to attributing the prudent practices of the government and relevant public outcry to the issue of policy quality, this article would like to present another rationale: The executive-led constitutional design is becoming the victim of its own success. Its unintended consequences are generating backfires to HKSAR government because of distorted party politics. The uneasy partnership within “pro-establishment” camp and its relationship with the administration pose a serious question to the governance of Hong Kong. Owing to the desire of Beijing to construct a political firewall against the democrats, the alignment of “proestablishment” camp, no matter how expedient, is still the main source for HKSAR government to obtain simple majority of the Legislative Council. Despite so far “pro-establishment” camp still is the key source of supporting votes for government bills and funding applications, the data

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and rationales provided by this article suggest that such political support is conditional, and is largely out of short-term negotiation and swapping of interests. In this token, the underlying factor of the prudent and cautious approach of Tsang administration to tackle with policies incurring political controversies becomes apparent: The executive-led model, albeit equips the administration with constitutional advantages over the legislature, is not conducive to the structural need for the government to secure stable supporting votes and alliance with parties in the legislature. The curbing of lawmaking and policy initiatives of the legislators does not imply empowering the executive branch, if the relationship between administrative leadership and political parties of the legislature remains largely as institutional solos linking up by instrumental and expedient deals, rather than an organic bonding with political affiliation and common believe — that is, the formation of ruling party.

9. A Ruling Party for Hong Kong? The constitutional framework of Hong Kong is not favouring the formation of ruling party. In addition to constraining the lawmaking and policymaking capacity of the legislature as a mean to rein in the political parties, the Chief Executive is also not allowed to retain any kinds of affiliation with political parties. Apart from de jure legal requirements, the de facto semi-firewall between the administration and political parties is also quite obvious. Politicians usually de-link from their political parties once joining the government: Henry Tang, the former Chief Secretary of Hong Kong, used to be a core member of Liberal Party; Elsie Leung, former Secretary for Justice, was a founding member of DAB. They all faded out from their own political parties after gaining official positions. Keeping political parties at arm’s length from administrative leadership, to a certain extent, is in line with the executive-led model. From Beijing’s point of view, it is not a bad way to prevent the governance of Hong Kong from being “seized” by the democrats by their larger share of votes in popular elections. This political expediency, however, has paved the way for the formation of structural problems to the governing capacity of HKSAR government, hindering the formation of a robust executive-

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legislative relationship among local parties and the administration. Reliance on “pro-establishment” camp breeds mistrust of the democrats against HKSAR government. Limited participation in policy-making and legislative initiatives of lawmakers, which is the rule of game ingrained in the executive-led model, on the other hand becomes the source of grievance and resentment of “pro-establishment” camp against the government too. Despite the “political safety” in the mind of Beijing is secured to a large degree, the executive-led model seems to be costly to the governance of HKSAR, which is manifested by dampening executivelegislative relationship, structurally half-baked political coalition of “proestablishment” camp, and the cautious approach of Tsang administration to circumvent political controversies. Without the fostering of organic bonding between the executive and legislative branches, that is, the formation of a ruling party, neither “pro-establishment” camp, the democrats or veteran public servant such as Donald Tsang can breakthrough the present political gridlock. In the light of the political concern of Beijing, reforming the executiveled constitutional model by empowering the lawmaking and policy-making initiatives of the legislature is not likely to be a viable option. Given this political reality, measures facilitating the formation of a coherent ruling coalition across the executive and legislative branch should be introduced: 1. The Chief Executive should be allowed to retain political affiliation. Partisan bonding between the Head of the government and lawmakers is a substantial and significant node to executivelegislative relations. Total disconnection of all partisan ties is not desirable for the Chief Executive to garner stable and solid supports in the legislature. 2. Political parties which are regarded as strategic partners of the government should be allowed to take a more significant stake and so responsibility during the course of policy formation and implementation. The fiascos of bidding to host Asian Games and government budget for the year 2011–12 revealed that even lawmakers of the pro-establishment camp can only have a limited involvement in government’s policy initiatives. Without genuine participation of strategic alliances in the policy

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formation, concerning political parties and groups could hardly be in line with the government, not to mention defending for a common consensus upon bitter public criticisms. On the other hand, involvement of political parties in policy formation process is also a kind of moral bonding to secure their future support: if concerning lawmakers disapprove the policy initiatives they have taken part in, their own public credibility will also be questionable. 3. To effectively get the targeted political parties involved in the policy formulation, the government should consider absorbing more significant members of political parties into governing leadership. Although in the saga of bidding to host Asian Games, former founding member of DAB, Secretary for Home Affairs Tsang Tak Shing failed to secure support of DAB, complaints from DAB reflected that the issue might attributed to insufficient involvement of and consultation with political party during the course of policy formation, rather than the fault of getting political parties incurred. Without effective node channeling capable talents from political parties to governing leadership, coordination and cooperation between the executive and legislative branches has slim hope to be strengthened. 4. On the other hand, such talent-channelling node between the government and political parties is also pivotal to attract talents from other social sectors to participate in the party politics of Hong Kong. After all, political parties are indispensable bases for training and nurturing political talents of the town. Gloomy prospect of political parties: limited hopes to take part in governing positions, semi-firewall between the legislature and executive branch because of the executive-led directive, are all contributing to the limited capacity of political parties in Hong Kong to breed high quality local political talents for next generation. The end result could be a vicious cycle: constrained prospect deterring social talents to join political parties, and shrinking sources of future talents dragging down the policy capacity of political parties, in turn aggravating the attractiveness of political career in Hong Kong. By no means, this scenario is beneficial to the governance of Hong Kong.

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In a nutshell, a proper and relatively matured executive-legislative relationship can flourish only with the re-building of a genuine ruling coalition across the administrative leadership and political parties of the legislature. Subject to the highly uncertain, yet utmost significant variable: the tolerance of Beijing to the formation of a ruling party in Hong Kong, the tension of executive-legislative relations will continue in foreseeable future. A key concern is how long, or what the governing cost can Hong Kong afford to tolerate such a non-sustainable constitutional framework in future? A government which is not allowed to be a ruling political party, political parties which have very limited hopes to gain governing opportunity by elections, and a governing mode which can only operate by expediency and tactics out of political situation of the day, but not policy visions across the executive and legislative branches out of common ideologies and core values. What matters most to the next decade of Hong Kong may be not who the next Chief Executive is, who will take the lead of various government bureaux and who are going to be represent us in the Legislative Council, but who can govern Hong Kong with own ideology and policy visions upon a self-defeating governing constitutional framework.

10. Epilogue — Not Only a Matter of Candidate On 1 July 2012, C. Y. Leung assumed the office of Chief Executive of Hong Kong. While Donald Tsang had gone, the structural uneasiness between executive and legislative branches has proven to be remained salient. Not mentioning the “personal” issues (perceived illegal construction of his own house, individual trustworthiness and the speculated tie with Beijing), Leung administration also suffered from the spiral of conflicts experienced by its precedence. Leung’s ambiguous plan for re-structuring bureaux was banned by lawmakers even before the new Chief Executive took over his office. Despite attributing to Tsang administration’s maneuvers, Leung’s cabinet was given a bloody nose by political groups across both democratic and pro-establishment camps on the matter of national education, a dubbed “brain-washing” project which triggered communitywide persistent fury and collective actions. Furthermore, Leung’s initiative

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of elderly subsidy has also encountered unexpected drawback with regard to whether mean-test should be imposed on applicants. A striking observation is the vocal opposition against official insistence on retaining mean-test by a well-recognised pro-establishment organisation: FTU. The incipient period of Leung administration was evident as a political bumpy ride: Persistent executive-legislative quagmire, expedient and fragile support by “pro-establishment” lawmakers to the newly formed cabinet, and open defiance and rifles between groups within “pro-establishment” camp — a noteworthy instance is how legislators representing business sector and grassroots dispute over the statutory level of minimal wage. In view of lingering social issues and class conflicts, the vision of executive-led governance could plausibly, again, be actualised as dissipating ruling capacity of Leung administration due to executivelegislative tension and pale support in the legislature. Even though Donald Tsang’s era has gone with the wind, the holy ghost of its fatal trouble — ruling with a ruling party is still hovering around the leadership of Leung’s government. A lesson that we must obtain from Donald Tsang administration is structural concern needs structural solution. The anticipation of a new era by a new leader without entertaining systematic reform is ideal, if not naive.

References 1.

Chan, K.K.L. (2007). Mei You Min Zhu De Zheng Dang Zheng Zhi (Party Politics in the Absence of Democracy). In Cong Jiu Qi Chu Fa: Gong Min She Hui De Di Yi Ge Shi Nian (Counting from 1997: The First Decade of the Civil Society). Hong Kong: SynergyNet.

2.

SynergyNet (2010a). Er Ling Ling Jiu Zhi Yi Ling Nian Du Xiang Gang Te Qu Li Fa Hui Ping Gu Bao Gao (Review of the HKSAR Legislative Council, 2009 – 10). Hong Kong: SynergyNet.

3.

SynergyNet (2010b). Er Ling Yi Ling Nian Du Xiang Gang Te Qu Guan Zhi Bao Gao (Review of the Governance Performance of the HKSAR Government 2010). Hong Kong: SynergyNet.

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4.

SynergyNet (2009). Er Ling Ling Ba Zhi Ling Jiu Nian Du Xiang Gang Te Qu Li Fa Hui Yi Jue Fen Xi Bao Gao (Voting Studies of the HKSAR Legislative Council, 2008 – 09). Hong Kong: SynergyNet.

5.

SynergyNet (2008). Er Ling Ling Si Zhi Ling Ba Nian Du Te Qu Li Fa Hui Yi Yun Biao Xian Ping Gu Bao Gao (Performance Review of HKSAR Legislative Councilors, 2004–08). Hong Kong: SynergyNet.

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C h a pt er 5

Political Marketing Campaigns of Chief Executive Donald Tsang The Challenges of Managing Legitimacy Deficit under a Semi-democratic Regime Brian C. H. FONG Lecturer, Division of Social Studies City University of Hong Kong

1. Introduction In Western democratic contexts, politicians all attach great importance to maintaining popular support. Therefore political marketing techniques have been widely adopted by political leaders from different backgrounds to manufacture and reshape their public images with a view to attracting more voters (Newman, 1999a; Newman, 1999b; Newman and Perloff, 2004; Busby, 2006). Although Hong Kong remains a semi-democratic regime and the government of the Hong Kong Special Administrative Region (HKSAR) is not elected by means of universal suffrage, since taking up the office of Chief Executive in 2005 Donald Tsang has followed the footsteps of Western politicians and has made shoring up popularity at the very core of his overall governing strategy. Such a strategic move by Donald Tsang has largely represented his efforts to address the serious crisis of governance under the C. H. Tung by rebuilding popular support for the HKSAR government through political marketing campaigns.

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This chapter argues that although the widespread use of political marketing techniques had successfully helped the Donald Tsang administration maintain high popularity ratings and alleviate the crisis of governance in its first three years in office, serious governance problems have been erupted once again since 2008 following a number of controversial political incidents surrounding the legitimacy of the HKSAR government. The central argument here is that the strong popular support once enjoyed by the Donald Tsang administration was actually built on sand only and did not fundamentally address the problem of legitimacy deficit facing the HKSAR government — which is the principal factor that plunges the HKSAR government into a series of crises of governance in the post-handover period. In fact, the structural crisis of legitimacy is inherent within present semi-democratic regime and it has finally been erupted following a string of political controversies since mid-2008. From this perspective, the rise and fall of the level of popular support for Donald Tsang throughout his terms of office have fully demonstrated that the problem of legitimacy deficit is structural in nature under Hong Kong’s existing semi-democratic regime and it could not be effectively dealt with by means of poll-driven governing strategy and political marketing campaign. Without the early implementation of comprehensive constitutional reforms, the structural problem of legitimacy deficit will remain a huge political gap that any HKSAR Chief Executive struggles to stride across and it will also continue to breed various governance problems for the HKSAR government in the years to come. This chapter will be divided into four sections. Section one briefly reviews the political marketing literature and discusses how this concept has been increasingly used as both a campaign strategy and a governing tool in Western democracies. Section two examines the background factors that contributed to the growing trend of poll-driven politics under the Donald Tsang era. Section three analyses the political marketing campaign of Donald Tsang and his strategy of manufacturing an image of “pragmatic leader”. Section four argues that as a consequence of the structural nature of the problem of legitimacy deficit under Hong Kong’s existing semidemocratic regime, the popular support base as engineered by Donald Tsang through political marketing campaigns was indeed very fragile and vulnerable. The conclusion is that how to manage the structural problem

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of legitimacy deficit will remain the biggest political challenge facing the HKSAR Chief Executive in the years to come. Fundamental constitutional reforms in particular the introduction of universal suffrage for the Chief Executive elections should therefore be introduced as early as possible so as to get Hong Kong out of this political quagmire.

2. Theoretical Review — From Political Marketing to Image Manufacturing In the study of political communication, political marketing has increasingly become an important theoretical perspective (Newman and Perloff, 2004). The rise of political marketing as an important academic discipline is evidenced by the growing number of relevant books, journal articles and academic conferences (Newman, 2002a). Bruce I. Newman, a pioneer and leader in political marketing research, defined “political marketing” as follows: “Political marketing is the application of marketing principles and procedures in political campaigns by various individuals and organisations. The procedures involved include the analysis, development, execution, and management of strategic campaigns by candidates, political parties, governments, lobbyists and interest groups that seek to drive public opinion, advance their own ideologies, win elections, and pass legislation and referenda in response to the needs and wants of selected people and groups in a society”. (Newman, 1999a, p. xiii)

In a nutshell, the concept of political marketing is based on one simple principle, that is, that the operation of the modern politics resembles the commercial marketplace: Successful business corporations must have a marketing orientation and can produce goods and services that can satisfy the needs of their customers; similarly, successful politicians in modern-day societies should have the same orientation and should be able to constantly create values and deliver promises that match the voters’ needs (Kotler and Kotler, 1999; Newman and Perloff, 2004). In the eyes of political marketing theorists, the trend towards political marketing can be seen as a reaction to the rise of political consumerism and the collapse of

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party loyalty in both western and emergent democracies (Lilleker, 2006; Newman, 1994). Political marketing is now seen as essential both for winning elections and for maintaining governance in modern democracies (Newman and Perloff, 2004). During the elections, politicians must put their fingers on the pulse of people and make positive response to voters’ concerns in order to win their votes; however, after winning office, political leaders are still required to keep a close watch over the national mood so that they can rally sufficient public support to put forward their policy agenda (Newman, 1999c, p. 4). In other words, the rise of political marketing has already turned the governing process into a permanent marketing campaign and modern politics has become predominantly market-driven (Newman, 1999b, p. 110; Newman and Perloff, 2004; Nimmo, 1999). A good example was the marketing strategies widely adopted by the United States’ President Bill Clinton. During the final two years of his first term of office and his re-election campaign in 1996, Bill Clinton relied on sophisticated political marketing techniques like strategic polling and focus group discussions to determine his policy proposals and even political rhetoric (Morris, 1997). As a consequence of the rise of a marketing orientation in the political arena, politics in Western democracies is now running like business and political marketing techniques that have been commonly adopted by business corporations are being used by politicians to craft their political messages to citizens. Nowadays, politics has already entered into an age of manufactured images underpinned by sophisticated marketing techniques (Newman, 1999c). To put it simply, political image is about how people perceive a politician through the mass media (Hollihan, 2009, p. 91). In order to market themselves successfully it is necessary for politicians to manufacture a clear image that delivers a singular message for establishing their major virtue in the minds of voters (Newman, 1999b). Studies have consistently demonstrated that the images of candidates are very important predictors of how voters will vote (Hollihan, 2009, p. 83) and therefore in this era of manufactured images, the success of a politician lies in his or her ability to craft an image that makes “a positive emotional attachment with the citizenry of a country” (Newman, 2001b).

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3. Political Marketing Comes of Age —  The Growing Trend of Poll-driven Politics under the Donald Tsang’s Era The political system of the HKSAR can be described as a semidemocratic regime characterised by an elected legislature and a largely appointed executive branch (Overholt, 2001). The Legislative Council, the legislature of the HKSAR, comprises of 30 members returned by geographical constituencies through direct elections and 30 members returned by functional constituencies (Lui, 2007). On the other hand, the Chief Executive enjoys less of an electoral mandate because he is elected by an 800-person Election Committee [1] and is appointed by the Central People’s Government (CPG) of Beijing (Li, 2007). Although Hong Kong is still some way from being developed into a full democracy, [2] in recent years the democratisation of the Legislative Council and the emergence of a vibrant civil society have gradually made the HKSAR government more susceptible to the influence of prevailing public opinion in the process of public policy-making. Such a growing trend of poll-driven politics [3] has become more prevalent after the replacement of C. H. Tung by Donald Tsang as Chief Executive in 2005. Since taking up the office of the HKSAR Chief Executive in 1997, C. H. Tung and his administration had been plunged into a series of crises

1. According to the Basic Law, the present 800-member Election Committee is composed of members from the following four sectors: (1) Industrial, commercial and financial sectors; (2) The professions; (3) Labour, social services, religious and other sectors; and (4) Members of the Legislative Council, representatives of district organisations, Hong Kong deputies to the National People’s Congress, representatives of Hong Kong members of the National Committee of the Chinese People’s Political Consultative Conference. Each of the above four sectors is further divided into subsectors that return a fixed number of members either by election or by nomination (Li, 2007). The composition of the Election Committee and its selection process reveal that the election of the Chief Executive in Hong Kong is under strict control from the Beijing government and its membership is dominated by the business community and pro-China politicians. For more details, see Li, 2007. 2. On 29 December 2007, the National People’s Congress, the supreme constitutional organ in China, provided a timetable for implementing universal suffrage in Hong Kong, making it clear that the Chief Executive may be elected by universal suffrage in 2017 and that after the Chief Executive is selected by universal suffrage, popular election for the Legislative Council may also be implemented in 2022. 3. For an account of the rise of poll-driven politics in post-1997 Hong Kong, see Fong, 2011.

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of governance. The unprecedented economic recession amid the Asian Financial Crisis, waves of salary reduction and lay-offs, the property market slump induced by the 85,000-unit annual housing target, the outbreak of avian flu in 1997, the chaos happened during the opening of the new Chek Lap Kok International Airport in 1998, the short piling housing scandals in 1999 and the mishandling of the outbreak of the Severe Acute Respiratory Syndrome (SARS), all these policy failures had served to undermine public confidence in the governing capacity of the C. H. Tung administration and eventually generated widespread discontent and frustration within the community. All kinds of public grievances and angers finally prompted Hong Kong people to march in protest against the C. H. Tung administration (Cheng, 2005). On 1 July 2003, over half a million Hong Kong people took part in the mass procession to express their dissatisfaction with C. H. Tung administration as well as the enactment of the Basic Law Article 23 legislation. Reflecting the serious crisis of governance faced by the HKSAR government, the July 1 protest rally marked the evaporation of local trust in C. H. Tung’s rule in the territory (Cheung, 2007). The series of crises of governance had eventually undermined the Beijing leaders’ confidence in C. H. Tung’s governing capacity, paving the way for his subsequent resignation. In March 2005, C. H. Tung tendered his resignation to the Chinese government and he was appointed by Beijing as the Vice Chairman of the Chinese People’s Political Consultative Conference. Donald Tsang, the Chief Secretary for Administration, succeeded C. H. Tung and was elected uncontested as the Chief Executive in the by-election held in June 2005. The replacement of C. H. Tung by Donald Tsang turned a new page in the political development of Hong Kong and what waiting for the new Donald Tsang administration was the challenging task of restoring effective governance in the HKSAR. Drawing on the bitter lessons of C. H. Tung, rebuilding the popular support base for the HKSAR government was considered by the new Donald Tsang administration to be of paramount importance in reinstating effective governance in the post-Tung era. In his inaugural Policy Address delivered in October 2005, Donald Tsang made it clear that public opinion had been a cardinal principle guiding the operation of his government:

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“The SAR government exercises its powers and functions in great transparency and under the watchful eye of the public. To me, a strong government does not work behind closed doors. Rather, it heeds public opinion, adopting the public interest as the guiding principle and accepting wide public participation in policy formulation. A government that operates this way is often characterised as having a clear direction, consistency in policy making, forceful and decisive leadership that is efficient and effective”. (Tsang, 2005a)

By putting great emphasis on rebuilding the popular support base for the HKSAR government, since taking up the office Chief Executive Donald Tsang had put shoring up popularity ratings at the very core of his governing strategy. In this connection, Donald Tsang had adopted various spin-doctoring and public relations initiatives to maintain his high popularity ratings. In February 2006, Donald Tsang appointed an experienced public relations consultant Andy Ho On-tat as his Information Co-ordinator and political commentator Lau Sai-leung as the Full-time Member of the Central Policy Unit. The appointments of these spindoctors into his governing team were commonly regarded by the political community as Donald Tsang’s effort to step up the work of political communication and marketing in an effort to boost his “permanent campaign” (South China Morning Post, 2006). Donald Tsang’s governing strategy of shoring up the popularity ratings of his administration was, by intention or default, similar to the “going public” strategy adopted by many United States Presidents when pushing ahead their policy agenda. According to American political scientist Samuel Kernell, modern United States Presidents usually adopt the strategy of “going public” to promote their policies by using methods like speaking directly to a national audience over radio or television and traveling around the country. By going over the heads of Congressmen and interest groups, the “going public” strategy allows the American Presidents to force compliance from fellow Washingtonians (Kernell, 2007). Quite obviously, by rebuilding and maintaining a solid popular support base for the HKSAR government, the Donald Tsang administration’s governing strategy was to reach out directly to the general public for political support and then pressurise the Legislative Councillors and other interest groups to accept and follow his policy proposals (Yeung, 2005a and 2005b).

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Given that maintaining high popularity ratings was at the very core of Donald Tsang’s overall governing strategy, poll-driven politics has become an unstoppable trend in the post-Tung period and sophisticated political marketing techniques had been widely adopted by the Donald Tsang administration to solicit popular support for its policy agendas and programmes.

4. Pragmatic leadership —  The Political Marketing Campaigns of Donald Tsang 4.1 The Permanent Campaign of Donald Tsang – Stepping out of Government House Because shoring up high popularity ratings were at the very core of his governing strategy, since taking up office Donald Tsang had put a lot of efforts on reaching out directly to the general public in an attempt to engineer a solid popular base for his administration. In June 2006, Donald Tsang openly pledged that he would “step out of the Government House” and grasp the mood of Hong Kong people by directly engaging them: “The higher one’s position in society, the more power one commands. The danger of this is that you can become locked within your own world, and detached from ordinary people. So I truly understand the importance of ‘stepping out’ of Government House…To grasp the mood of the people you need to view issues from their perspective; and, to go into their lives to feel their hardships, sorrows and happiness. This is what we call ‘empathy’ —  the ability to feel and understand the needs of others”. (Tsang, 2006a)

In line with his poll-driven governing strategy, in the past few years Donald Tsang had made use of various methods to communicate with the public and market his policy agenda, including holding media sessions, delivering public speeches, addressing the Legislative Council, conducting community visits, publishing “Letters to Hong Kong” and making televised speeches. Table 5.1 surveyed the number of these political marketing activities conducted personally by Donald Tsang since taking up the office of the HKSAR Chief Executive in March 2005. These empirical findings fully demonstrated that Donald Tsang not only

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relied on traditional communication methods like holding media sessions, delivering public speeches, addressing the Legislative Council and conducting community visits to get his message out to the Hong Kong people, he explored new channels of communication that were rarely used by the former Chief Executive C. H. Tung including publishing “Letters to Hong Kong” and making televised speeches. When compared with C. H. Tung who only published four “Letters to Hong Kong” and never delivered televised speeches throughout his eight years in office, since assuming the office of Chief Executive Donald Tsang had so far published 32 “Letters to Hong Kong” (almost one letter in every quarter) and even made three unprecedented prime-time televised speeches on constitutional affairs issues. [4] Table 5.1 Donald Tsang Political Marketing Activities (March 2005–December 2011) Press Conference/Media Session

316

Public Speech

287

Address to Legislative Council

27

Community Visit/Social Activity

114

Letter to Hong Kong Televised Speech Total Number of Political Marketing Activities

32 3 779

Source: Author’s own research based on the information available at the website of the Chief Executive Office (www.ceo.gov.hk)

4. Donald Tsang had delivered three prime-time televised speeches in November 2005, December 2007 and April 2010. All of these three televised speeches were related to constitutional reform issues, demonstrating Donald Tsang’s effort to get popular support by speaking directly to the Hong Kong people. For full scripts of these speeches, see Tsang 2005a, Tsang 2007 and Tsang 2010.

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4.2 Appealing to the Support of Pragmatic Majority —  Donald Tsang’s Message of “Pragmatic Politics” A closer examination on the political rhetoric of Donald Tsang revealed that not only did he adopt various communication channels to engage with the public, he had tried to project a favourable image in the minds of the people by employing more sophisticated political marketing techniques. Various opinion polls have indicated that although the politics in post1997 Hong Kong has from time to time been shaped by the confrontation between the pro-establishment camp and pro-democracy camp, those hardcore supporters of these two political camps were only minority in the society. In fact, the majority of Hong Kong people held centrist and pragmatic political views and identified themselves as “non-partisan independents” with no strong political inclinations [5] (Wong, 2007). It was comprehensible that the existence of such a “pragmatic majority” had provided the foundation for Donald Tsang to build up his political positioning and marketing strategy (Fong, 2011). As a career civil servant with more than 40 years public administration experience as well as a non-partisan and politically neutral public image, Donald Tsang’s rich governing experience was highly regarded by the general public (Chinese University of Hong Kong, 2005). In this regard, Donald Tsang’s political marketing strategy was clearly to position himself as a “pragmatic leader” in an attempt to emphasise to the Hong Kong people his ability to resolve difficult political issues through a pragmatic approach (Loh and Lau, 2007). By portraying himself as a political leader guided by pragmatism and rationalism, such a political marketing strategy was tactfully designed to allow Donald Tsang to make best use of his moderate political outlook

5. According to an opinion polls conducted in 2007 by Professor Wong Ka-ying (a distinguished pollster from the Hong Kong Institute of Asia-Pacific Studies of the Chinese University of Hong Kong), only 28.2% of Hong Kong citizens claimed that they were supporters of the pro-democracy camp while about 8.8% said they were inclined towards the pro-China camp. By contrast, over 45.2% of Hongkongers identified themselves as centrists and another 17.9% said they were non-partisans with no strong political inclinations. Therefore Wong analysed that strongly partisan supporters in Hong Kong only accounted for about 37% of the local population and the remaining 63.1% (including 45.2% of centrists and 17.9% of non-partisans) who held moderate political views and emphasised socio-economic issues (Wong, 2007).

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and civil service background to appeal to the support of the pragmatic majority in the society (Fong, 2011). In this connection, Donald Tsang first outlined his political message of “pragmatic politics” by delivering a statement in the radio programme “Letter to Hong Kong” in August 2006. Highlighting the Father of the European Union Jean Monnet’s successful experience in realising the vision of a united Europe through rationalism and pragmatism, Donald Tsang said the story of European integration could shed light on the issue of constitutional reform in Hong Kong. Tsang called on Hongkongers to adopt “pragmatic politics”: “Monnet’s pragmatic approach may serve as a lesson on the way in which we deal with constitutional reform in Hong Kong. I believe that we can realise our vision only by assuming a pragmatic, down-to-earth attitude to resolve difficult issues, and to adjust our pace from time to time. This is what commitment is all about”. (Tsang, 2006b)

Tsang then went on to link up his perceived strength (i.e., governing capacity) with the idea of “pragmatic politics” and to target his constituency (i.e., the pragmatic majority) by arguing that pragmatism was a defining characteristic of Hongkongers: “I am fully aware that I will never be a hero of any kind, and that I may look very awkward chanting slogans. After such a long career in the civil service I have learnt, however, that the ability to resolve issues, administrative skills, tenacity and, above all, commitment are essential elements of pragmatic politics. Pragmatism is a defining characteristic of Hong Kong people. Working industriously together, we have forged an economic miracle. And that is why I am confident that all political differences can be resolved as long as we maintain a pragmatic approach”. (Tsang, 2006b)

One month after his first address on “pragmatic politics”, Donald Tsang expounded his political message of “pragmatic leadership” by delivering a keynote speech at the Chinese University of Hong Kong in September 2006. In an attempt to contrast himself with those partisan politicians in the Legislative Council, Donald Tsang emphasised his strong problemsolving ability and vowed to achieve good governance by practising “pragmatic leadership”:

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“The ability to execute a policy is the key to successful, pragmatic leadership. While a major part of a politician’s work is to communicate with the people, it is easy to talk big, but do little. One who has the ability to deliver on his promises is one who understands well the relation between the major principles and specific details of each policy. A successful political leader is on top of every detail. Some government policies are unsuccessful even though they present good concepts. It is because the administration fails to attend to the specific details in the implementation process. If that occurs quite often, people will gradually lose faith. In doing business, you may earn all back in one single big deal to recover the losses of nine small deals, but this never happens in politics. Even if you fail on one occasion, you will lose out. So, in launching a new policy, we must plan carefully and deliberate thoroughly on implementation details, and make all necessary revisions to ensure the policy objectives can be achieved. This is the mark of leadership”. (Tsang, 2006c)

Since then, Donald Tsang had made use of every public occasion to promote his political message of pragmatic-styled governance and to reinforce his image as a pragmatic leader. Table 5.2 clearly demonstrated that “pragmatic politics” and “pragmatic leadership” were the repeated themes in Donald Tsang’s political rhetoric. No matter Donald Tsang was holding media session, delivering public speeches, addressing the Legislative Council, delivering Policy Addresses or publishing “Letters to Hong Kong”, the keyword “pragmatic” had been frequently employed by him to describe and explain his leadership and governance style. Obviously, “pragmatic leadership” was a defining theme of Donald Tsang’s political marketing campaign.

5. Popular Support Building on Sand —  The Challenges of Managing Legitimacy Deficit under a Semi-democratic Regime The landslide victory of Donald Tsang in the public opinion battles in the 2007 Chief Executive Election provided important clues about the effectiveness of Donald Tsang’s political marketing campaign in shoring up and sustaining his popular support. Despite of the fact that the HKSAR Chief Executive was elected by a “small-circle” 800-member

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Table 5.2 Content Analysis of Donald Tsang’s Political Rhetoric (March 2005–December 2011) Total Number of Political Statements/ Speeches

Frequency of the Keyword “Pragmatic”

Press Conference/Media Session

316

48

Public Speech

287

62

27

18

7

28

32

19

2

6

672

181

Address to Legislative Council Policy Address Letter to Hong Kong Televised Speech Total

Source: Author’s own content analysis based on the information available at the website of the Chief Executive Office (www.ceo.gov.hk). The essence of the content analysis was to scan all the political rhetoric made by Donald Tsang and then to determine the frequency of the keyword “pragmatic” (“Wu Shi” in Chinese) within his political rhetoric.

election committee, and the support of Beijing leaders had made the re-election of Donald Tsang completely certain at the outset, the 2007 Chief Executive Election was widely regarded as a “mock popular election” because Donald Tsang had to compete fiercely with prodemocracy candidate Alan Leong Kah-kit in the popularity race in various opinion polls (Fong, 2011). In this connection, Donald Tsang’s political marketing campaign and his manufactured image of pragmatic leader had provided him with an important edge over Alan Leong in the public opinion battles and there was overwhelming public support for Donald Tsang’s re-election bid. By framing himself as a pragmatic leader with extensive governing experiences and good problem solving skills, Donald

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Tsang appealed to the support of pragmatic majority in Hong Kong  (Fong, 2011).[6] Opinion polls indicated that Donald Tsang’s political message of pragmatic leadership connected nicely with the non-partisan and pragmatic mainstream public in Hong Kong. Table 5.3 indicated that Donald Tsang established a sizeable lead over Leong in terms of both suitability for the post of Chief Executive (+25.9) and the degree of popular support (+66.9%). Table 5.4 provided more solid evidence on how Donald Tsang’s message of pragmatism was able to win the hearts and minds of Hong Kong people. It showed that the majority of people expressed the view that Donald Tsang was doing much better than Alan Leong in various aspects of competence as the Chief Executive, and Donald Tsang margin of victory over Alan Leong was particularly significant for the aspects of “leadership capacity” (+69.1%), “administrative capacity” (+67%) and a blueprint on Hong Kong’s development (+50%). All these opinion surveys were strong evidence that Donald Tsang had been successful in making a “positive emotional attachment” with the mainstream public by manufacturing an image of “pragmatic leader”. It was comprehensible that the successful re-election campaign of Donald Tsang, together his on-going political marketing activities, had helped sustained his popularity ratings at a relatively high level in the first three years of his tenure. Figures 5.1 and 5.2 illustrated that public ratings for Donald Tsang were maintained at a very stable and high level between 60 points to 70 points during March 2005 to May 2008 and the vast majority of people gave solid support to him as Chief Executive. Although these opinion polls could not in themselves allow us to exactly quantify the persuasive effect of Donald Tsang’s political marketing activities throughout this period of time, there was little doubt that the stock of political goodwill as enjoyed by the Donald Tsang administration was part of the result of his poll-driven governing strategy.

6. For an account of the 2007 Chief Executive Election and an analysis of Donald Tsang’s campaign strategy, see Fong, 2011.

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Table 5.3 Public Rating and Support for Donald Tsang and Alan Leong Question

Support for

Support for

Donald Tsang

Alan Leong

71.9

Please use a scale of 0–100 to rate the candidate, with 0 indicating absolutely unsuitable for the post of Chief Executive, 100 indicating absolutely suitable and 50 indicating half-half. How would you rate Donald Tsang and Alan Leong? If you were to vote for the Chief Executive tomorrow, which one would you choose?

46.0

(+25.9)

81.0%

14.1%

(+66.9%)

Source: University of Hong Kong, 2007. Figures in brackets denote Donald Tsang’s winning margin over Alan Leong.

Table 5.4 Public Appraisal of Donald Tsang and Alan Leong Aspects of Competence

Administrative capacity

Support for

Support for

Donald Tsang

Alan Leong

72.7% (+69.1%)

3.6%

Leadership capacity

71.2% (+67%)

4.2%

Honesty and integrity

42.4% (+28%)

14.4%

A blueprint on Hong

58.2% (+50%)

8.2%

88.4% (+87.5%)

0.9%

45.2% (+18.7%)

26.5%

Kong’s development Maintaining good relations with the CPG Resonating better with mainstream public opinion Source: Lingnan University of Hong Kong, 2007. Figures in brackets denote Donald Tsang’s winning margin over Alan Leong.

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Figure 5.1 Rating of Chief Executive Donald Tsang (June 2005–June 2012) 75 70 65

Rating

60 55 50 45 40 35 June 2005

June 2006

June 2007

June 2008

June 2009

June 2010

June 2011

June 2012

Date of Survey

Source: The Public Opinion Programme, University of Hong Kong (http://hkupop.hku.hk)

Figure 5.2 Hypothetical Voting of Donald Tsang as Chief Executive (June 2005–June 2012) 75 70

No

65

Rating

60 55 50 45

Yes

40 35 June 2005

June 2006

June 2007

June 2008

June 2009

June 2010

June 2011

June 2012

Date of Survey

Source: The Public Opinion Programme, University of Hong Kong (http://hkupop.hku.hk)

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Nevertheless, the situations had been changed significantly in the middle of 2008. Since mid-2008, the public ratings and public support on Donald Tsang had decreased sharply and his popularity never recovered to the high level which he once enjoyed in the three years of his tenure. What was the factor that resulted in the declining public support for Donald Tsang and his administration? This chapter argues the strong popular support once enjoyed by the Donald Tsang administration was actually built on sand only. Although the widespread use of political marketing techniques had successfully helped Donald Tsang maintain high popularity ratings in his first three years in office, his public support ratings have sunk and stayed at low level following a number of political controversies surrounding the legitimacy of the HKSAR government. In other words, Donald Tsang’s tactfully designed political marketing campaign did not fundamentally address the problem of legitimacy deficit facing the HKSAR government under the existing semi-democratic regime and therefore the crisis of governance has been erupted once again after the collapse of Donald Tsang’s popular support base. Local literature on post-1997 Hong Kong’s governance had long recognised that the problem of legitimacy deficit is the principal factor that plunges the HKSAR government into a string of governance crisis (e.g. Cheung, 2005a, 2005b and 2010; Li, 2001; Ma, 2007; Scott, 2005 and 2007; Sing, 2001, 2003 and 2009; Tang, 2008). In this regard, Hong Kong’s semi-democratic regime, where a non-popularly elected Chief Executive co-exists with a partially-elected Legislative Council, [7] has given rise to a problem of legitimacy deficit for the HKSAR government in the posthandover period: Although the HKSAR could always get through its bills and initiatives in the Legislative Council with the support of the pro-

7. The political system of the HKSAR can be described as a semi-democratic regime characterised by an elected legislature and a largely appointed executive branch (Overholt, 2001). The Legislative Council, the legislature of the HKSAR, comprises 30 members returned by geographical constituencies through direct elections and 30 members returned by functional constituencies (Lui, 2007). On the other hand, the Chief Executive enjoys less electoral mandate because he is elected by an 800-person Election Committee (which is dominated by business tycoons and pro-China figures) and is appointed by the Central People’s Government of Beijing (Li, 2007).

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government majority, [8] the democratic opposition which commands more legitimacy than the Chief Executive will often delegitimise the government actions by mobilising public opinion against government misdeeds and controversial policies (Ma, 2007a, pp. 132–133). The strong popular support ratings enjoyed by Donald Tsang in his first three years of office, which was engineered through his poll-driven governing strategy and a tactfully designed political marketing campaign, has ever created an impression that the Tsang administration could make use of its high popularity to pull Hong Kong out of the post-1997 crisis of legitimacy. Unfortunately, “popularity” is, after all, not equal to “legitimacy” given that the latter is fundamentally concerned with the exercise of governmental power in accordance with legality, justification, and consent from the standpoint of its citizens (Gilley, 2009, p. 11). From this perspective, the non-popularly elected HKSAR government is destined to be trapped in a structural crisis of legitimacy because it falls short of the moral expectations and strong demands for democratic reforms of the Hong Kong people, and such a legitimacy crisis also breeds an inherent distrust toward the Chief Executive and his officials (Cheung, 2010). Against this backdrop, while the strong popular support base as engineered by Donald Tsang’s political marketing campaign might have provided the HKSAR government with more leverages when dealing with the challenges of the democratic opposition from 2005 to 2008, the

8. It was the strategy of Beijing leaders to install a stable pro-government majority in the post-handover Legislative Council, so that legislators would not pose serious challenges to the executive branch (Lau, 2000). Such a pro-government majority was achieved through a tactfully designed electoral system. First of all, the Annex II of the Basic Law provides that not more than half of the 60-strong Legislative Council is made up by directly-elected members in the first ten years of post-1997 Hong Kong while another half will be elected through functional constituencies. Such a composition is to make sure that the Chief Executive could receive stable support from those conservative business and professional legislators returned by functional constituencies (Lau, 2002). Secondly, to restrict the political space of the pro-democracy activists, the “single-member constituency first-past-thepost system” was replaced by “proportional representation” as the electoral formula for geographical constituency elections. The rationale behind this reform was that the more popular pro-democracy candidates would not able to win a great majority of directly-elected seats in geographically constituencies while the less popular pro-China candidates would be decently represented with their minority vote (Lau, 1999 and 2002). With the combined effects of the proportional representation electoral system and the existence of functional constituencies, it is anticipated that a stable progovernment majority will be installed and engineered in the post-handover Legislative Council while the pro-democracy opposition will be condemned into a minority position (Ma, 2007a).

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“Pandora Box” of legitimacy crisis inherent under the semi-democratic political system was finally exposed in mid-2008 as a result of the political controversies surrounding the appointment of Under Secretaries and Political Assistants. In May 2008, Donald Tsang appointed the first batch of Under Secretaries and Political Assistants, but surprisingly the whole selection process was severely criticised by the media and the democratic opposition as a “black-box operation”. The Donald Tsang administration’s refusal to disclose the exact salaries of the Under Secretaries and Political Assistants, together with the appointment of several candidates from progovernment parties as well as people with close connections with the Director of the Chief Executive’s Office, added fuel to the accusations that whole selection process was not fair and transparent enough (Fong, 2012). All these controversies and criticisms surrounding the appointment of Under Secretaries and Political Assistants finally exposed the inherent legitimacy crisis and depleted the stock of political goodwill enjoyed by Donald Tsang since taking up the office of the Chief Executive in March 2005 (Cheung, 2010). Worse still, the crisis of legitimacy and the widespread sense of distrust have been further intensified following a string of policy controversies such as the post-retirement employment of senior civil servant Leung Chin-man in 2008, the introduction of a meanstesting mechanism for Old Age Allowance in 2009 and the distribution of cash coupons for compact fluorescent lamps to residential users in 2009, etc. All these controversies had further undermined the positive image of Donald Tsang in the minds of the public and finally destroyed the popular support base that he had maintained through his poll-driven governing strategy and political marketing campaign (Figures 5.1 and 5.2). The rise and fall of the level of popular support for the Donald Tsang administration in recent years have fully demonstrated that the problem of legitimacy deficit is structural in nature under Hong Kong’s existing semi-democratic regime and it could not be effectively dealt with through political marketing campaigns. In fact, the structural crisis of legitimacy and widespread sense of distrust toward the HKSAR government is inherent within present semi-democratic political system. Although Donald Tsang’s political marketing campaign had enabled him to maintain a high level of popularity between 2005 and 2008, the popular support as enjoyed by his administration was very fragile and vulnerable and

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the structural crisis of legitimacy was always at the edge of an eruption. Once the positive image of Donald Tsang was severely undermined by the political controversies surrounding the expansion of political appointment system in mid-2008, the structural crisis of legitimacy and widespread sense of distrust inherent within the existing political system was finally erupted contributing to a new wave of governance crisis.

6. Conclusion This article drew on the political marketing literature to examine the polldriven governing strategy of the Donald Tsang administration since 2005. Although Hong Kong’s was still some way from being developed into a full democratic regime, in recent years the gradual opening up of the political system has made the HKSAR government more susceptible to the influence of prevailing public opinion in the process of public policymaking and such a trend of poll-driven politics has become more prevalent after the replacement of C. H. Tung by Donald Tsang as Chief Executive in 2005. To restore public confidence in the HKSAR government, since taking up the office Chief Executive Donald Tsang had put shoring up popularity ratings at the very core of his overall governing strategy. In line with his poll-driven governing strategy, Donald Tsang had made use of various methods to communicate with the public and tried to portray himself as a pragmatic leader by employing more sophisticated political marketing techniques. Although the poll-driven governing strategy and the tactfully designed political marketing campaign had sustained Donald Tsang’s popularity from 2005–08 and provided him better leverages in dealing with the challenges of the democratic opposition during that period, they did not fundamentally resolve the structural legitimacy crisis inherent in Hong Kong’s existing semi-democratic regime. The popular support base of the Donald Tsang administration was indeed built on sand only and the structural crisis of legitimacy was always at the edge of an eruption. Once the high popularity enjoyed by Donald Tsang was undermined by a string of political controversies such as the expansion of political appointment system and the post-retirement employment of senior civil servant Leung

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Chin-man, the structural crisis of legitimacy inherent within the HKSAR political system was finally erupted bringing about a new wave of governance crisis. During his final days in office, Donald Tsang was even troubled by a number of personal scandals and the legitimacy of the whole HKSAR government was on the edge of breakdown. To conclude, the rise and fall of the level of popular support for Donald Tsang throughout his terms of office have fully demonstrated that the problem of legitimacy deficit is structural in nature under Hong Kong’s existing semi-democratic regime and it could not be effectively dealt with through poll-driven governing strategy and political marketing campaign. Without the early implementation of comprehensive constitutional reforms in particular the introduction of universal suffrage for the Chief Executive elections, the structural problem of legitimacy deficit will remain a huge political gap that any Chief Executive struggles to stride across and it will also continue to breed various governance problems for the HKSAR government in the years to come.

7. Epilogue At the time of writing, the new Chief Executive C. Y. Leung, in his initial months in office, is already repeating the story of Donald Tsang. Despite of his efforts to position himself as a caring political leader focusing on improving people’s livelihood, public mistrust towards C. Y. Leung has been breeding rapidly since his inauguration in July 2012 and the political legitimacy of his administration has been seriously challenged in several controversial issues such as the implementation of National Education Curriculum and consultation on North East New Territories Development Plan. How the poll-driven politics has been twisted with the structural problem of legitimacy deficit under the C. Y. Leung administration shall be a topic for future research.

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25. Loh, Christine (2006). Hong Kong’s Relations with China: The Future of “One Country, Two Systems”. Social Research, Vol. 73, No. 1, Spring 2006, pp. 293– 317. 26. Loh, Christine and Lai, Carine (2007). Reflections of Leadership: Tung Chee Hwa and Donald Tsang, 1997–2007. Hong Kong: Civic Exchange. 27. Lui, Percy Luen-tim (2007). “The Legislature” in Lam Wai-man, Percy Luentim Lui, Wilson Wong and Ian Holiday (ed.) Contemporary Hong Kong Politics: Governance in the Post-1997 Era. Hong Kong: Hong Kong University Press, pp. 39–58. 28. Ma Ngok (2007a). “Political Parties and Elections” in Lam Wai-man, Percy Luentim Lui, Wilson Wong and Ian Holiday (ed.) Contemporary Hong Kong Politics: Governance in the Post-1997 Era. Hong Kong: Hong Kong University Press, pp. 117–134. 30. Ma Ngok (2007b). Political Development in Hong Kong: State, Political Society and Civil Society. Hong Kong: Hong Kong University Press. 31. Morris, Dick (1997). Behind the Oval Office: Winning the Presidency in the Nineties. New York: Random House. 32. Newman, Bruce I. (1994). The Marketing of the President: Political Marketing as Campaign Strategy. Thousand Oaks, CA: Sage. 33. Newman, Bruce I. (1999a). “Preface” in Newman Bruce I. (ed.) Handbook of Political Marketing. Thousand Oaks, CA: Sage, pp. xiii–xiv. 34. Newman, Bruce I. (1999b). The Mass Marketing of Politics: Democracy in an Age of Manufactured Images. Thousand Oaks, CA: Sage. 35. Newman, Bruce I. (2002). Broadening the Boundaries of Marketing: Political Marketing in the New Millennium. Psychology and Marketing, Vol. 19, No. 12, December 2002, pp. 983–986. 36. Newman, Bruce I. and Perloff, Richard M. (2004), “Political Marketing: Theory, Research and Applications” in Lynda Lee Kaid (ed.) Handbook of Political Communication Research. Mahwah, NJ: Lawrence Erlbaum Associates, pp. 14– 43. 37. Nimmo, Dan (1999). “The Permanent Campaign: Marketing as a Governing Tool” in Newman Bruce I. (ed.) Handbook of Political Marketing. Thousand Oaks, CA: Sage, pp. 73–86. 38. Scott, Ian (2005). Public Administration in Hong Kong: Regime Change and Its Impact on the Public Sector. Marshall Cavendish International.

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39. Scott, Ian (2007). "Legitimacy, Governance and Public Policy in Post-Handover Hong Kong", Asia Pacific Journal of Public Administration, Vol. 29, No. 1, June 2007, pp. 29–49. 40. Sing Ming (2001). The Problem of Legitimacy for the Post-Handover Hong Kong Government. International Journal of Public Administration, Vol. 24, No. 9, 2001, pp. 847–867. 41. Sing Ming (2003). “Legislative-Executive Interface in Hong Kong” in Christine Loh and Civic Exchange (ed.) Building Democracy: Creating Good Government for Hong Kong. Hong Kong: Hong Kong University Press, 2002, pp. 27–34. 42. Sing Ming (2009). “Hong Kong at the Crossroads: Public Pressure for Democratic Reform” in Sing Ming (ed.) Politics and Government in Hong Kong: Crisis Under Chinese Sovereignt. Hong Kong: Hong Kong University Press, 2002, pp. 112–135. 43. South China Morning Post (2006). Tactic May Spin Out of Control, Chief Told, 21 February, p. 2. 44. Tang, James T.H. (2008). “Hong Kong's Continuing Search for a New Order: Political Stability in a Partial Democracy” in Carola McGiffert and James T.H. Tang (ed.) Hong Kong On The Move: 10 Years as the HKSAR.Berkeley, CA: University of California at Berkeley, pp. 18–36. 45. Tsang Yam-kuen (2005a). “Strong Governance for the People”, 2005-06 Policy Address Statement (Website: www.policyaddress.gov.hk/05-06/eng/index. htm). 46. Tsang Yam-kuen (2005b). “Left marching On the Spot, Further Away from the Goal of Universal Suffrage”, Televised Speech by the Chief Executive Tsang Yamkuen (Website: http://www.info.gov.hk/gia/general/200511/30/P200511300296. htm). 47. Tsang Yam-kuen (2006a). “Stepping Out of Government House”, Statement made in the radio programme “Letter to Hong Kong” on 24 June 2006 (Website: http:// www.ceo.gov.hk/chi/letter/24-06-2006.htm). 48. Tsang Yam-kuen (2006b). “Pragmatic Politics”, Statement made by Chief Executive in the radio programme “Letter to Hong Kong” on 26 August 2006 (Website: http://www.ceo.gov.hk/chi/letter/26-08-2006.htm). 49. Tsang Yam-kuen (2006c). “Pragmatic Leadership”, Speech by the Chief Executive at assembly at Chinese University of Hong Kong on 29 September 2006 (Website: http://www.info.gov.hk/gia/general/200609/29/P200609290191.htm). 50. Tsang Yam-kuen (2007). “Statement by the Chief Executive on Constitutional Reform”, Televised Speech by the Chief Executive Tsang Yam-kuen (Website: http://www.info.gov.hk/gia/general/200712/12/P200712120137.htm).

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51. Tsang Yam-kuen (2010). “Chief Executive's Statement on 2012 Constitutional Reform”, Televised Speech by the Chief Executive Tsang Yam-kuen (Website: http://www.info.gov.hk/gia/general/201004/14/P201004140190.htm). 52. University of Hong Kong (2007). “HKU POP SITE Releases Final Set of Chief Executive Election Rolling Survey Wrap-up Figures 2007”, The Public Opinion Programme, 26 March 2008 (Website: http://hkupop.hku.hk/chinese/release/ release452.html). 53. William Overholt (2001). Hong Kong: The Perils of Semidemocracy. Journal of Democracy, Vol. 12, No. 4, October 2001, pp. 5–18. 54. Wong Ka-ying (2007). “From Citizens’ Political Inclinations to Examine Political Reorganisation in Hong Kong” (in Chinese).Hong Kong Daily News, 7 March 2007. 55. Yeung, Chris (2005a). “Only Reaching Out Will Ease the Strain” (South China Morning Post, 22 September 2005. 56. Yeung, Chris (2005b). “A Positive Force For Politics”, South China Morning Post, 2 November 2005. 57. Yeung, Chris (2007a). “Opportunity Mixed with Danger”, South China Morning Post, 5 February 2007. 58. Yeung, Chris (2007b). “Vision and Reality”, South China Morning Post, 12 January 2007. 59. Yeung, Chris (2007c). “Tsang Strategy to Add Another String to His Bow Tie Image”, South China Morning Post, 31 January 2007. 60. Yeung, Chris (2007d). “Down, Not Out”. South China Morning Post, 24 March 2007.

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C h a pt er 6

Leadership Job Done, Leadership Pledge Unaccomplished Chris YEUNG News Director, Hong Kong Economic Journal EJ Insight

1.  Introduction From a self-proclaimed lone salesman to a top civil servant in the British colonial government and the post-1997 administration, Donald Tsang has reinvented himself as a politician when he ran for the post of chief executive after his former boss C. H. Tung stood down in 2005. Tung cited health reason for his premature departure. Tsang was elected uncontested amid high hopes among his fellow citizens the veteran public administrator would help pick up the pieces and restore public confidence in the government, which had been troubled by a litany of leadership failures, policy blunders and mishandling of crises under Tung’s leadership. As widely expected, Tsang sought re-election for a full five-year term when his two-year stint was due to expire in July 2007. He defeated his rival from the pan-democratic camp, Alan Leong Kah-kit, by a big margin in the election held in March. In his declaration speech entitled “Building a new Hong Kong, creating quality life together” marking the beginning of his campaign in early 2007, he underscored “the need to create a new Hong Kong”. “As Chief Executive”, he said in his speech, “I will create a better new Hong Kong for our new generation and for the people of our

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city. Today, I will remember what I said to myself when I joined the civil service 40 years ago: ‘I will get the job done’ ”. The campaign slogan, “I’ll get the job done”, has, perhaps to the surprise of Tsang, become a recurrent subject of controversy in his second term. Put in the context of the Hong Kong culture, the catchy slogan has carried a negative message of “just doing what is required”. Known for his sophisticated mind and sharp rhetoric, last governor Chris Patten has hit the head of the nail when he described Tsang, one of his former top aides, as a “consummate civil servant” during a visit to Hong Kong after Donald Tsang rose to the pyramid of power. It was interpreted as a veiled ridicule against Donald Tsang for his self-proclamation of being a politician. One of the most pointed, albeit veiled, critique against the leadership credentials of Tsang, at least being seen as such, has ironically come from a senior mainland official in July 2011. Speaking at a closed door meeting with a group of university students from Hong Kong in Beijing, Wang Guangya said the city’s civil servants lacked visions and have not done enough long-term planning for Hong Kong. Civil servants, the Hong Kong and Macau Affairs Office Director has lamented, have no ideas about how to solve the city’s practical social, economic and political problems by taking into the overall situations. “They listened to their boss (UK government) before (the handover). Now that they have become the boss they don’t know how to be the bosses, the masters”.[1]

Coming in the fifth, and final, year of Tsang’s second term, Wang’s no-nonsense remarks have caused a stir in the Hong Kong society, in particular within the senior echelon of the civil service. Political pundits and analysts tried to decipher the message. At least two political heavyweights, Allen Lee Peng-fei and Rita Fan Hsu Lai-tai, concurred Wang was targeting at Tsang for his failure to take boss-like leadership. This is plainly because Tsang is still being widely seen as an iconic figure of the fleet of civil service despite his switch of role as a politician in 2005.

1. Ming Pao, 27 July 2011.

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A few days after Wang spoke, Tsang took advantage of his presence at a leadership forum to respond to Wang’s remarks and, importantly, to expound his thoughts of leadership.[2] Leaders, he said, should possess a list of qualities. They are:   1. Integrity;   2. Passion;   3. Patriotism;   4. Humility and self-reflection;   5. Vision;   6. Pragmatic approach;   7. Discipline and perseverance and diligence;   8. Good team-ship;   9. Communication; 10. Nurturing talent; 11. Wisdom. Tsang’s address on leadership, which is the most detailed of its kind since he took power in 2005, was immediately dismissed as too general and all-compassing to be thought-provoking enough to stir up interest among the populace. One participant told this author: “Based on what he said, he’s a counterfeit leader. He’s done the opposite of what he said a leader should be and should do… There’s no true leadership”.

Tracking opinion polls conducted by the city’s two leading university pollsters, namely The University of Hong Kong (HKU) and The Chinese University of Hong Kong, have shown a clear decline of the popularity of Tsang and his administration. According to the HKU poll, support rating of Tsang fell to 45.6 points out of 100 in July 2011. In early June,

2. Speech by Donald Tsang at a Bauhinia Foundation seminar on 30 July 2011 can be found at www. ceo.gov.hk.

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2012, his rating hit its lowest level of 38.5 points. And 78% of the 1,041 respondents showed no confidence in Tsang. The same poll conducted in June 2005 found he received a score of 72.6 points. Public support for Tung took a dive in the wake of the historic July 1 march in 2003 when half a million joined the protest against a list of government failures.[3] The intense feeling of discontent towards the Tsang team during most of their second term has come unexpected. Popularity of Tsang hit high points when he was elected to succeed Tung. Hopes were high he could solve the problems that had crippled the Tung administration and thus put the government back to the right track. Constrained by structural deficiencies in the political system and doomed by his deficit in leadership qualities, Tsang has failed to leave a shining legacy in his eight-year reign. Few doubt he is one of the most successful civil servants straddling the political changeover. But he is hardly a visionary, reform-minded leader. Indeed, he might have never aspired to become the head of the Special Administrative Region (SAR) after he survived the 1997 handover and kept the post of financial secretary in the SAR government. When the opportunity of running the SAR knocked on his door, he took it as a job that he, as in his civil service career, would do his best to get it done. If anything, the criticism by Wang Guangya shows Beijing is not happy with Tsang. In Hong Kong, figures in opinion poll speak for themselves. If the job of the chief executive is to serve two masters, namely Beijing and Hong Kong people, he can hardly claim to have succeeded. The legacy of Tsang, if any, took a dramatic turn for the worse in the final year of his second term. As the major contenders of the post of chief executive — C. Y. Leung and Henry Tang Ying-yen — were hit by scandals one after another in late 2011 and early 2012, Tsang, who is widely known to be a supporter of Tang, faced vehement attacks against his integrity in the wake of media revelations about his personal dealings with tycoons and lavish business trips. The string of negative publicity started with a paparazzi-style investigative report on his trip to Macau, where he and his wife were given VIP treatment at a banquet held at a casino plus residence

3. Popularity surveys of the Chief Executive Donald Tsang and SAR government can be found at The University of Hong Kong’s public opinion programme website, www.hkupop.hk.

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and transport on a luxury yacht owned by a tycoon. It was followed by reports that he was given an alleged favourable rental deal by a mainland tycoon for a 6,000-feet penthouse in one of his properties in Shenzhen. He insisted there was no wrongdoing in his rental deal, which was part of his retirement plan, but later announced he had cancelled the rental agreement. Ridiculed by some media as “greedy Tsang” for his propensity for taking favors, Tsang was troubled by another series of media reports about his stay in lavish hotels during his overseas visits. Faced with a massive outcry, Tsang took a rare move to ask the independent Audit Commission and form another top-level committee headed by former chief justice Andrew Li Kwok-nang to review the system and arrangements over the chief executive’s acceptance of favours and accommodation during overseas trips respectively. His popularity plummeted further. Calls for his resignation grew. Given the fact the revelations erupted at a time close to the end of his term, the chorus of calls for him to step down had not gained momentum. Compared with his predecessor, Tsang may be luckier to escape a premature departure. In view of the damaging impacts of the premature exit of Tung, another early departure of his successor is no doubt the last thing Beijing wants. Tsang’s survival, however, does not necessarily mean he would be given higher scores in the verdict of the Beijing leadership. The opposite is perhaps true. Since retirement, Tung was named to become a vicechairman of the Chinese People’s Political Consultative Conference, joining the ranks of state leader in the Chinese hierarchy. Analysts doubt whether Tsang will be accorded the same status after his retirement. Publicly, the central government leaders are full of praises for the contribution of Tsang to the SAR. But judging from remarks made by some pro-Beijing figures and media, there are good reasons to believe Beijing feels dissatisfied with the performance of Tsang, in particular over the handling of social contradictions such as rich-poor gap. Reports about his backing for Henry Tang and alleged play of negative publicity tactic against C. Y. Leung during the chief executive election have also put him in an unfavourable position in Beijing now that Leung has won the top post. Worse, his personal image, integrity, trust and confidence among his excivil service colleagues and the society at large are still in doubt after he stepped down. Unfair it may sound. The harsh reality is that his alleged

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wrongdoings and scandals in his final months of leadership, not what he did during his decades-long public administration, would be remembered by the people — in a negative sense.

2.  Beijing, Hong Kong Expectations The removal of Tung from office with his second term halfway through would have been the last thing Beijing wants in its grand plan for the reversion of Hong Kong to Chinese sovereignty. Admittedly, the decision to appoint the prominent shipping tycoon to be the first SAR chief has not been taken without thorough, serious considerations. With hindsight, Tung seemed to have already been identified as a potential leader in the SAR when he was appointed by last governor Chris Patten to the Executive Council in early 1990s. Though kept his head low, Tung had taken part in major decisions at the Exco, the government’s top advisory-cum-decision making body. His deep ties with the Communist Party-led Chinese government had been seen as a great asset to his political career. His worldwide shipping business had also provided a strong platform for him to foster close ties with the political and business elites in the international community. Thanks also to his good public image as a sincere, honest and fatherly figure, Tung won the post with high popularity in 1996. Politically, the “through train” arrangement that allowed the entire team of top officials, together with the whole civil service, to keep their posts after the handover was a big boost to public confidence. Economically, the city saw a swift return to boom times after confidence was shattered in the wake of the Tiananmen Square crackdown in 1989. Property prices reached high levels. The worst scenario had not happened at and after midnight 1 July 1997. Beijing could not expect a better start of the SAR. In his speech at the ceremony to mark the establishment of the Hong Kong SAR on 1 July 1997, Tung has envisioned the long-term developments of Hong Kong under “one country, two systems” policy while pledging to address some immediate livelihood issues. They include housing, education and elderly welfare, which were described by the proBeijing figures as time bombs left behind by the British government.[4]

4. The first policy address by former chief executive C. H. Tung can be found at www.ceo.gov.hk.

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Imbued with a strong sense of mission and vision, Tung was eagerly keen to resolve the longstanding problems and lead his fellow citizens to a brighter future. It did not take long for him to face the harsh realities. Externally, the outbreak of the Asian financial turmoil and the burst of information technology bubble in 2000 had devastated the city’s economy. On the domestic front, he ran into enormous difficulties in turning his visionary plans into reality. Speculation was rife that his working relationship with the then chief secretary Anson Chan had not been as smooth and effective as expected. With the government holding no votes in the Legislative Council, the Tung administration had encountered difficulties in pushing through contentious policies in the legislature. Signs of Beijing’s dismay with Tung’s leadership had begun to surface after he was re-elected. It was best illustrated in comments by former Premier Zhu Rongji that the city had suffered from the problem of “discussion without decision, decision without implementation”. Among the populace, there was a strong feeling that Tung was long in talking the vision-talk, but short in walking the walk. In a self-appraisal, Tung was adamant his policies were correct, but had not done a good job in politics and public relations work. As soon as he was re-elected unopposed in 2012, he took a series of bold steps to strengthen his ruling team. Tung had widened the net to name more like-minded reformist elites to his second team with the introduction of Principal Official Accountability System (POAS). In addition to banker Antony Leung Kamchung who joined in 2011 as Financial Secretary, the second-team members include investment banker Frederick Ma Si-hang (Secretary for Financial Services and the Treasury); environmental expert Sarah Liao (Secretary for Environment) and former Chinese University vice-chancellor Arthur Li Kwok-cheung (Secretary for Education). With a handful of top brains from the private sector being brought in to help inject new ideas and work style to boost the government’s political capacity, the Hong Kong-style ministerial system has significantly marginalised the role of the chief secretary and, importantly, the entire fleet of Administrative Officers. The POAS has emerged as the last straw on the back of the camel in the Tung-Anson Chan partnership, which has been described as the “dream team”. Chan resigned from the government in 2011. A series of political and policy blunders made by the second Tung administration including the poor handling of the Basic Law Article 23 legislation and the outbreak of an epidemic disease SARS (Severe Acute Respiratory Syndrome) had

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promoted half a million people to stage a march on 1 July 2003. It was followed by the resignation of three key team members, namely Antony Leung, Secretary for Security Regina Ip Lau Suk-yee and health minister Yeoh Eng-kiong. Two years later, Tung stepped down, citing sore legs. The premature end of the reign of Tung has come as a surprise to the Hong Kong society, including people who have close ties with Beijing. In view of the mantra of maintaining stability in the first 10 years of the SAR and the imperative of shoring up international confidence in the policy of “one country, two systems”, a removal of the first SAR chief had been seen as a remote possibility, if not inconceivable idea. That it happened reflects Beijing’s fears about the governability of the city in the wake of the massive outburst of public anger in the 2003 July 1 rally. With the impact of the July 1 shock began to lessen, Beijing has adopted a two-pronged tactic in its Hong Kong policy. On the economic front, China has rolled out more supportive policies towards Hong Kong under the Closer Economic Partnership Arrangements. Restrictions over the visits of mainlanders to the city were lifted. The pace of economic integration with Guangdong has been accelerated. On the political front, the appointment of Tsang, an old hand from the civil service, to the helm signifies a political change both in style and substance aimed at putting governance back onto a healthy footing. A diplomatic cable written by a former United States Consul-General in Hong Kong James Cunningham in October 2005 which was released on WikiLeaks in September 2011 read: “He (Tsang) told me that his basic charge from Beijing is to show that his team can run Hong Kong as efficiently as did the British, and to solve problems before Beijing become involved”.

The message is apparently clear. First, Beijing still preferred not to get involved with Hong Kong affairs for obvious reasons. Doing so will make Beijing vulnerable to criticism for failing to honor the promise of noninterference policy towards Hong Kong after 1997. Mainland officials have also repeatedly said Hong Kong people knew better than they did in running the city. Secondly, Beijing held out hope that the elevation of Tsang to succeed Tung would help bring back government efficiency as

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it was the situation before 1997. Following the departure of former chief secretary Anson Chan, Tsang had emerged as the natural successor to help regain public confidence and restart the government machinery. Shocked and rocked by the massive political uproar of Hong Kong people, the Chinese government would have, not surprisingly, given more weight to the administrative skill and experience and, to a certain extent, the political acumen of Tsang in times of crisis. Whether or not Tsang had visions and long-term plans for Hong Kong was less important, at least for the short term. An editorial of the Chinese-language pro-Beijing Ta Kung Pao spoke highly of the credentials of Donald Tsang: “He understands the operation of government well, what people think… He will be able to end the deplorable state of endless political bickering in a period of time. He can lead the SAR government and Hong Kong society back to the right track. (He will be able to) facilitate the economic recovery and build a harmonious and stable society”. [5]

With 38 years of service in government — including six years as Financial Secretary and four years as Chief Secretary — Tsang’s skill, knowledge and experience are beyond doubt. His long-time relationship with some core leaders of the pan-democratic camp has also been seen as a big asset in engaging the opposition, at least being seen as such at that time. Not surprisingly, his appointment was acceptable to Beijing and majority of Hong Kong people when it was made.

3.  Self-reinvention of Donald Tsang After serving in the government for nearly four decades in various positions, Tsang was aware of the imperative of change, at least in style, to prepare for playing a new role as chief executive. Learning a lesson from Tung’s failings and the worsened government-people relations, he has mounted a street campaign to try to win the hearts and minds of ordinary

5. Chris Yeung, South China Morning Post, 29 May 2005.

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people. Hours after he declared his candidacy on 2 June 2005, he took his campaign to the street one week after an intensive round of sessions with the Election Committee members.[6] In a skillfully arranged schedule, he began his first campaign tour with a visit to his old home at the former police headquarters in Hollywood Road in Central district to reinforce his image as a Hong Kong boy brought up in an ordinary family. The next stop saw him rubbing shoulders with a fishing household on a boat outside the Aberdeen typhoon shelter at the southernmost part of the Hong Kong Island in a throwback to the city’s past as a fishing village. It ended with a visit to a traditional Chinese cake shop and lunch at a fast-food outlet at the IFC Mall at the heart of Central district, which symbolise the city’s future. Images of Tsang sporting casual wear without business satire and his trademarked bowtie, which, rightly or wrongly, is branded as Westernstyle, received positive response in the society. Praising the performance of Tsang’s first-week street campaign, the Chinese-language middle classoriented Hong Kong Economic Journal commented he has achieved early success in his transformation towards a new role. “From being a rules-oriented civil servant, he has changed is role to become a political leader good at mobilising mass support through going into the masses”.

Tsang’s weeks-long campaign can hardly be compared with the hardfought street battles mounted by candidates in other popular elections. At its best, it was more cosmetic than substantive given the fact only 800 elites in the Election Committee were eligible to vote. He apparently felt good with the first taste of street politics and the process of selftransformation. Hours after he was declared the winner of the chief executive election in June 2005, he said: “I am no longer a civil servant… the major element of my current job is politics”.

He has vowed to continue to be a listening leader.

6. Chris Yeung, South China Morning Post, 16 June 2005.

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“The dialogue that has been started with various sectors of society will not be a one-off exercise… I shall keep this very meaningful interchange going”.[7]

The civil servant-turned-self-proclaimed politician has started to realise that political theatrics are part and parcel of the job of a politician who aspires to serve the people and to get their mandate and support. Political observers said Tsang seemed to feel comfortable and self-assured doing what a politician is supposed to do during his campaign. But to excel his new role, it is vitally important that he is able to go beyond the set-piece theatrics of a politician to act as a political leader, who leads with the consent of the people. This will require not just political showmanship in grabbing media attention, but quality and skills, charm and moral power of leadership in seizing the hearts and minds of the people. Dubbed a great survivor in politics, Tsang has impressed friends and foes with his qualities and instincts playing the role of a politician. The challenge was for him to prove that he is a genuine leader with vision and ideas, and that he has the courage and determination to defend core values and the broadmindedness to listen to the voices of dissent. There were doubts and questions about what he stood for as his ascendancy became reality. “Is he a reformist or a gradualist? Is he a conservative or a liberal? Is he a realist or an idealist? Is he an opportunist? Or is he a pragmatist? Is he pro-market? Or will he be more inclined to intervene in the economy with state fiats? Is he pro-business? Or is he a champion of competition policy? Is he content with the role of a capable administrator? Or does he aspire to become a man of the people, the leader of Hong Kong?”

These are the questions this author has raised in a column published in the South China Morning Post on 29 May 2005. It can be boiled down to a fundamental question of whether he would continue to act as a civil servant, as he had been for over 38 years, or he would transform to become a politician, a political leader. Judging from his governance since 2005, it can be argued that the set minds, ethos and work style of a

7. Chris Yeung, Sunday Morning Post, 19 June 2005.

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civil servant have become ingrained in his DNA. This is despite the fact that he might have tried to make serious efforts to make big changes in order to do a better job in politics. It was proved to be a difficult task for Tsang, whose strong self-belief and character has ironically become a mental block for him to adapt to the new role. Contradictions over the two different roles of him have been manifested clearly in his policies and a host of controversies during his term.

4.  The Jury is Out on Economic Leadership Promoting economic development has been consistently high on Tsang’s agenda until the last two years of his reign. In his 2007–08 Policy Address, he said: “l insist on promoting economic development as our primary goal. The reason is simple. Without economic prosperity, people cannot make a decent living and all visions are just empty talk. And even during the good times we must continue to make progress by achieving our targets in a step-by-step pragmatic manner. We must not engage in empty talk about ideals, in the vain hope of achieving everything in one go”.[8]

He coined the term “progressive development” as his approach featuring the formation of a tripartite consensus with enterprises and individuals to help strive for a balanced, sustainable development. He elaborated further his thoughts about economic philosophy. “I adhere to the principle of ‘big market, small government’," and to containing public expenditure below 20% of Gross Domestic Product (GDP) as far as possible. However, I object to a dichotomy between the roles played by the Government and the market, whether it be a strong belief in the omnipotence of government intervention or a passionate support of the free market being sacrosanct. Both are sweeping generalisations. In striving for economic growth, complex and unique relationships exist among different sectors of our economy. We should take a practical look at the respective responsibilities of the Government, enterprises and individuals”.

8. The 2007–08 Policy Address can be found at www.ceo.gov.hk.

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He defined government’s role is to formulate policies conducive to sustainable development so that every citizen has the opportunity to share the fruits of prosperity and progress. The government, Tsang said, needs to balance the political, economic and social demands of different interest groups in the community, and to make progress while maintaining stability. It should take the lead at the policy-making level in certain areas such as promoting economic integration with the Mainland, taking forward cross-boundary infrastructure projects and making joint efforts to develop a world-class metropolis. Compared with his predecessor, Tsang has trodden cautiously on the economic front — not without good reasons. Tung came under heavy criticism for giving too much grandiose talk, but doing too little concrete work to create new engines of economic growth. While turning to the old formula of success of infrastructure-led economic development strategy, Tsang has reaffirmed what he coined as “four pillar industries” in the early years of his reign. They are financial services, tourism, shipping and logistics and professional services. Obsessed with the pivotal role of the financial industry, he has said keeping the financial sector vibrant would be enough to feed most, if not all, people in Hong Kong. He was harshly ridiculed and criticised after the global financial turmoil in 2008, which had rocked the Hong Kong economy. Faced with pressure from critics, Tsang later elaborated his economic strategy to add on six new industries as potential areas of growth in the city’s matured economy. They are education services, medical services, testing and certification services, environmental industries, innovation and technology and cultural and creative industries. Except for a short period of time after the financial meltdown triggered by the collapse of the ill-fated US firm Lehman Brothers, the Hong Kong economy has seen strong growth during the Tsang era. Unemployment rate went down to a low point of 3.2% in the third-quarter of 2012. Thanks to the supportive policies of the central government, Hong Kong has continued to play a key role in the country’s economic development and process of internationalisation of its currency, known as Renminbi. Despite some hiccups in projects including the Hong Kong–Macau–Zhuhai bridge, the ten major infrastructure projects on Tsang’s agenda when he took power have made progress, giving strong vigor to sectors, in particular

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construction. The increased flow of capital from the mainland to Hong Kong has brought about some unintended consequences, however. One example is the property sector. The unregulated flow of funds in the property market has shot up prices to new heights, posing the risk of asset bubble and pent-up grievances of young middle-class people who aspired to own their flats. Faced with a massive public outcry against runaway property prices and warnings of a property slump, the government has formulated a series of property and fiscal measures to increase land and flat supply and dampen speculative activities in 2010 and 2011. Tsang announced the resumption of subsidised housing programmes in his swansong Policy Address in October 2011. There was no drastic overhaul of the housing policy, however.[9] Known for his pragmatism and ingrained belief of laissez-faire approach in economy, Tsang has largely stuck to the longstanding course of economic development without making drastic changes after he came to power. His minimalist approach was generally received well by the business sector, particular the big players, with many of whom held the view that government is always not the solution to problems, but the problem itself. They feel confused and unsure about the aggressive approach by Tung to venture into new sectors such as biotechnology, Chinese medicine centre and fresh flowers market. Given, they would rather hope the government will do less but smart and leave them alone to give full play to their entrepreneurial spirit and instinct. Others disagreed, however. Warning of the competition from cities in the mainland including Shanghai, Shenzhen and in the region such as Singapore, some critics fear Hong Kong will lose out if the government fails to take a proactive role in re-directing the course of economic development and finding new engines of growth. They lamented the slow progress in the development of the six industries identified by Tsang in his second term. The jury is out on whether his “steady-as-it-goes” approach in promoting economic development serves the best interest of the city. If results justify the means,

9. Details of the new Home Ownership Scheme can be found in 2011–12 Policy Address from www. ceo.gov.hk.

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Tsang cannot be faulted for treading carefully in times of economic uncertainties. But taking a longer perspective, critics have a point to argue Hong Kong has failed to seize the time to formulate long-term strategies and plans to prepare for the challenges ahead.

5.  It’s Livelihood, Stupid Less than two years to go before his second term ends, Tsang made a clear shift from his “economic first” strategy to a focus on bread-and-butter issues when he attended a Legislative Council question-time in July 2010. Declaring success over the passage of the 2012 electoral reform blueprint, he said the government would focus on livelihood improvement. While continuing to “make the economic pie bigger”, he has underlined the importance of wealth distribution for everyone to have a share of the fruits of economic prosperity. He singled out low-income families, housing and elderly welfare as major issues he would address in his 2010–11 Policy Address in October. The shift of strategy was made as it became apparently clear the issue of widening wealth gap has threatened social, political stability. A selfproclaimed follower of free market economy, Donald Tsang has resigned to the reality that economic growth would not necessarily create the so-called “trickle down” effect that enables low-income earners to share the fruits of success and make a decent living. The growing feeling of unfair distribution of wealth in some quarters of the society has aggravated the deep-rooted contradictions that Premier Wen Jiabao has alluded to during the latter part of Tung’s term and throughout the first and second term of Tsang. The title of Tsang’s 2010–11 Policy Address speaks for itself. Entitled “Sharing Property for a Caring Society”, Tsang has tried to respond to criticism that his government has tilted clearly towards the vested interests, in particular the business sector, in their policies. He said in his policy address: “With the retreat of the economic shadow, livelihood issues are now the community’s principal concerns, with housing, the wealth gap and elderly welfare drawing the greatest attention”.

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Tsang announced new initiatives including a new subsidised housing scheme My Home Purchase Plan, textbook subsidies for students and an expanded transport subsidy scheme. One major initiative was the setting up of a HK$10 billion Community Care Fund, to which the government and the business sector will each contribute half, or HK$5 billion, to support people in need.[10] Five months after the policy address was delivered, the government made another attempt to ease public discontent through the annual Budget, or more accurately another massive giveaway package. Under the 2011–12 Budget announced by the Financial Secretary John Tsang on 23 February 2011, the government proposed to inject HK$6,000 into each provident fund account holder. The initiative would cost a total of HK$24 billion. The fund injection proposal was immediately criticised as a bad idea as soon as it was announced. With more lawmakers threatened to vote against the Budget, the government made an unprecedented U-turn less than one month after the blueprint was delivered. The original plan was scrapped. In a replacement proposal that has surprised government’s allies as much as their opponents, the government announced a cash handout of HK$6,000 to each permanent resident who are aged 18 or above. Critics slammed the government for abandoning its traditional fiscal prudence for the sake of political expediency. The abrupt change of policy has also raised concerns about the deterioration of governance and the lack of far-sightedness and determination in addressing such chronic problems as income gap through such long-term solutions as welfare policy. The swath of livelihood measures rolled out by the Tsang administration in the second last year has ironically given more ammunitions to government critics that the Tsang team was no longer setting their eyes on the long-term needs and development of Hong Kong. Or, perhaps more accurately, they were neither in the mood nor imbued with the “can-do” spirit to venture into difficult issues however important they are to the future development of Hong Kong.

10. More details can be found in 2010–11 Policy Address from www.ceo.gov.hk.

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Taking a lesson from Tung’s downfall and the cue from the Beijing leadership about “people-oriented” governance approach, Tsang flew the banner of people when he delivered his maiden policy address in 2005. Entitled “Strong governance for the people”, he said: “Enhancing people’s well-being is the first order of business of good governance”. But when it comes to policy-making, Tsang has suffered from mental block and the attitude of intellectual arrogance when trying to meet the expectations of people over social policies. The cash handout saga in 2011 and an abortive attempt to introduce means test to old age allowance recipients in 2008 are cases in point. Less than a fortnight after he proposed to make an increase of old age allowance to HK$1,000 with the condition of a new means test for recipients in his 2008–09 Policy Address, Tsang made a U-turn to raise the so-called “fruit money”. The proposal for a new means-test mechanism for recipients was swiftly dropped. From the perspective of public administrator, the idea to tighten the rules over the elderly subsidies is not difficult to understand. Speaking at a radio programme after the delivery of the policy speech, the then Secretary for Labour and Welfare Mathew Cheung Kin-chung maintained the proposal is a “responsible decision” in view of the problem of ageing population. “We know it is unpopular, but for Hong Kong’s long-term undertaking we need to start thinking about the major principles… The annual spending on the old age allowance is now HK$3.9 billion. Even if the level is not raised it will incur HK$9.7 billion in 25 years’ time. And if a one-for-all HK$1,000 (allowance) is offered, the amount will be HK$14 billion”.

The long-term financial burden aside, Tsang and Cheung, who were both ex-Administrative Officers, seemed to have stuck to the traditional principles and practices of policy-formulation that features rational, factbased analysis without taking into full account the political expedient needs. The political reality is that the “fruit money” policy has been widely accepted as a show of respect and love and care for senior citizens in the society. Importantly, there has been no strong public opinion demanding for a change of the system, not to mention the introduction of a means-test mechanism. As public expectations for participation in policies grew, the surprise announcement of the proposal without prior consultation makes

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a mockery of Tsang’s pledge of a “people-based” government. As the government’s initial defiance in the face of a chorus of criticism against the idea showed, Tsang and his team appeared to genuinely believe they had done the right thing for the long-term well-being of their fellow citizens. After making the U-turn, Tsang admitted that he had to compromise by allowing “emotion” to override “rational debate”.[11] Pledging “strong governance for the people” in his 2007–08 Policy Address, Tsang has promised to lead a “can-do” government to deliver concrete improvements to the well-being of the people. As he prepared for his swansong policy address in summer 2011, he has suffered from high unpopularity and intense public discontent over a long list of livelihood and political issues. To be fair, problems such as income disparity and working poor are inevitable in a capitalist economy like Hong Kong. While pressure for the government to do more for the under-privileged people is mounting, there are equally strong calls for the government not to introduce overly-generous welfare. A chief executive with civil service background and no affiliations with any social class should have found himself in a better, relatively neutral position to handle the highly contentious issue of wealth distribution. Ironically, the opposite is true. Tsang has failed to play leadership role to help ease the class conflicts. Class conflicts indeed grew more intense during the term of Tsang administration. Public grievances towards the malpractices of big businesses, in particular property developers, in doing business have fuelled the so-called “hate-the-rich” sentiments in the society. Alleged government-business collusion has become one of the deep-rooted socio-political conflicts. Property hegemony has been widely seen as an unwelcome phenomenon of the city’s free market economy. When Tung took the helm of the SAR, there were concerns about a possible tilt towards the interests of the business sector with Hong Kong being led by a businessman. Tung was a world-renown shipping magnate before he ran for the top post. Set against that background, it could not be more ironic that Tsang, formerly a civil servant, has arguably come under more fierce attacks for being too kind and generous to the rich.

11. Chris Yeung, South China Morning Post, 26 October 2008.

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6.  Politics and Governance: “Give Me the Tools” To rebuild strong governance, Tsang has moved to embrace changes, both in style and substance, in his leadership. Emboldened by the positive feedback from the public towards his charm offensive during his election campaign in 2005, he has promised to continue to “lower one’s posture” by taking a condescending attitude towards the people after he took power.[12] Importantly, he revamped his core team and decision-making structure and advisory system in his 2005–06 policy address. He appointed more elites into the Executive Council, the highest-level advisory body. A three-member “kitchen cabinet” led by the Director of Chief Executive Office and comprised of an information coordinator was installed. The reorganisation, plus the restoration of a bigger role of the Chief Secretary and the Financial Secretary in coordinating the work of other policy secretaries, shows Tsang would like to act more like a politician, similar to his former boss last governor Chris Patten.[13] Re-elected for another term in 2007, he took one major step further by introducing two more layers of political appointees to the POAS, namely deputy secretaries and political assistants. He said in the 2005–06 policy address: “As the Chief Executive, I have to be up to the task of political leadership. My foremost job is to fully grasp Hong Kong’s political landscape. I must adequately understand public sentiment, anticipate future opportunities and challenges, decides on the overall policy direction, enhance the good relationship between the central authorities and the SAR, secure the community’s trust and support for the government, strengthen cooperation with the Legislative Council, and create a political and social environment conducive to effective governance”.

Grandiose though it sounds, Tsang has at the same time breathed an air of down-to-earth pragmatism in his governance. He said: “I will only include in my Policy Address those measures and policies that are

12. Donald Tsang speaks at RTHK’s Letter of Hong Kong Programme on 31 March 2007. Full content can be found at www.ceo.gov.hk. 13. Chris Yeung, Sunday Morning Post, 16 October 2005.

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capable of implementation within the current term of this government”. He elaborated further his thoughts about pragmatic politics in the RTHK programme Letter to Hong Kong on 26 August 2006. He said: “I am fully aware that I will never be a hero of any kind, and that I may look very awkward chanting slogans. After such a long career in the civil service I have learned, however, that the ability to resolve issues, administrative skills, tenacity and, above all, commitment is essential elements of pragmatic politics”.

Hoisting the banner of pragmatism is no doubt smart tactic in view of the deep-rooted culture of pragmatist thinking among Hongkongers. The “administrative”, “problem-solving” approach in governance, however, has proved to be inadequate in meeting the rising expectations of the society towards the government. It did not take long for Tsang to run into immense difficulties in governance, which are undeniably attributable, at least partly, to the flaws in the political system and, partly, to his personal failures in leadership. On the policy front, he has stuck to the conventional wisdom adopted by the British colonial rulers and the civil service before 1997, namely “if it ain’t broke, don’t fix it.” In view of the profound complexities and sensitivities of major social reforms in education system and housing policy after the 1997, Tsang has refrained from making more drastic changes to the two major policy areas after he took the helm. Obsessed with fears about a property slump caused by the reintroduction of subsidised housing, known as home ownership scheme, after the handover, he has stonewalled calls for the government to help meet the aspirations of the populace over housing either through public rental housing or subsidised ownership scheme not until his final year. Less than a week before he delivered his last policy address on 12 October, Tsang admitted mistakes in their housing and land policies in an interview with the Commercial Radio on 8 October.[14] “We have made mistakes, to be honest, in some matters (and policies,) in particular the decision not to do a list of things including the supply of new

14. Chris Yeung, Sunday Morning Post, 9 October 2005.

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land and the building up of land reserves after the bursting of the housing bubbles. Housing prices fell by 66% at that time. There’re a lot of negative asset holders. The whole market, government and business sector may have overreacted, and did not anticipate that the economy would recover that soon”.[15]

In his 2011–12 policy address, Tsang announced the resumption of a new Home Ownership Scheme (HOS) with a target of providing up to 5,000 units a year in the long-run. Over four years beginning from 2016, the government hopes to provide a total of 17,000 HOS flats for low- and medium-income families.[16] His setback in housing policy has inspired some political analysts to compare his performance with that of late former governor Lord MacLehose, who presided over a period of change from 1971 to 1982. They highlighted the massive housing plan initiated by Lord MacLehose as one of his major achievements that showed the late governor’s farsightedness and leadership. A retired high-ranking government official has recollected the background of Hong Kong’s 10-year public housing plan launched by Lord MacLehose in the 1970s to illustrate the importance of leadership at a private talk with a group of business figures and professionals in 2011.[17] The story goes like this: A middle-ranking civil servant was summoned by Lord MacLehose on a Friday after a blaze in Shek Kip Mei that had left thousands of people who lived in squatters homeless. “The governor asked us to give a report on how many people are living in such a bad condition on the following Monday. We spent the weekend compiling the report and told the governor the figure: 1.3 million people. Lord MacLehose then said: ‘Let’s solve it in 10 years. Let’s have a 10-year housing programme’.” There is no denying the housing policy, better known as “85,000-unit housing policy”, spearheaded by Tung has ended in a dismal failure. (Tung vowed to boost home ownership with an annual supply of 50,000 flats

15. Chris Yeung column published on www.hkej.com on 10 October, 2011-10-20. 16. See 2011–12 Policy Address at www.ceo.gov.hk. 17. Information was provided by a participant of the conference to the author on a non-attributable basis.

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from the public and 35,000 from the private sector as one of his major social policy goals after 1997.) That it was scrapped without a formal announcement has turned Tung into a subject of ridicule by critics. Some sympathisers have argued Tung has undeniably made an effort to think big and long despite his lack of skills to make it happen. With property prices soared and affordability of ordinary families over housing fell sharply beginning from 2009, the reluctance, and belatedness, of Tsang in making changes in housing policy have become indefensible. An informed source close to the Tsang team said Tsang has acted and thought even more like a civil servant after he became the chief executive. “He has trodden even more cautiously. Given his top position, you expect him to have guts. He has powers to make things happen. But it seems to me he has become subsumed by the civil service system”.

The source has argued the reluctance, if not failure, of Tsang to abandon the mentality of civil servant to act as a political leader has worsened the problem of governance in his second term. “One of the biggest problems in governance is that we have an extra layer of political appointees who still adopted the mentality of civil servant to govern. I don’t know why many of the politically-accountable officials are unwilling to talk to more people and do more press interviews and political shows. The problem is more obvious in internal discussions on policies. They asked questions such as the financial implications, precedent effects of policies, which are supposed to be asked by civil servants… How can they respond to the aspirations of the people?”.[18]

Suffered from the lack of legitimacy and mass-based electoral mandate, it is critically important for any chief executive to govern with evenhandedness — and to be seen as such. To fly the banner of a chief executive of all-people could help reduce his or her legitimacy deficit and secure broad public support in policies. That the government faced even more criticism for colluding with the business sector speaks volumes of failure of the Tsang administration to demonstrate to the people that they worked

18. From an off-the-record session attended by a Donald Tsang team member.

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for the whole, not parts, of the society. The lack of even-handedness in dealing with various political forces has resulted in a major failure of Donald Tsang in playing a leadership role in fostering unity in the society. The opposite is true. The “friend-foe” mentality and approach of Donald Tsang have aggravated the problem of divisiveness in the political landscape. In light of Donald Tsang’s long-time acquaintance with some veteran Democrats including founding chairman of the Democratic Party Martin Lee Chu-ming, hopes were high when he succeeded C. H. Tung in 2005 that government relations with the Democrats could be significantly improved. After the pan-democrats bundled together to vote down the 2007/2008 electoral blueprint, the government-democrats relations turned sour and bitter. When Donald Tsang launched his re-election campaign, the battle-line was clearly drawn. Siding with Donald Tsang was the so-called pro-establishment camp led by the Democratic Alliance for the Betterment and Progress of Hong Kong. It was also comprised of the Liberal Party, Federation of Trade Unions, Heung Yee Kuk and some like-minded, non-affiliated legislators. On the opposite side was the pan-democratic camp, which was comprised of a list of pro-democratic political parties and grass-roots groups. The divide has become firmly entrenched in the political landscape after Donald Tsang said in a newspaper interview he would “get closer to allies, distance farther from enemies”. It sounds hardly surprising and indeed natural for any political leader to clearly identify who their friends and enemies are. To say it publicly is another matter. Not surprisingly, it needlessly provoked the pan-democrats and cornered them to be the eternal opposition. Meanwhile, the ties between Tsang and the pro-establishment forces were proved to be fragile. The fragilities of the government-proestablishment alliance have been laid bare in incidents such as the “fruit money” means-test mechanism (Democratic Alliance for the Betterment and Progress of Hong Kong [DAB] was the first to oppose to the proposal) and the plan to scrap the Legco by-election arrangement. (Most progovernment members refused to rubber-stamp it.) The shaky ties have become a constant source of uncertainty in governance during Donald Tsang’s rule.

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The ability and propensity of Tsang to act as an unifier, instead of a divider, have also been called into question during the final stage of the tussle over the passage of the 2012 electoral blueprint in 2010. In an unprecedented, highly-contentious move, Tsang led his cabinet to mount a street campaign, known as Act Now, seeking to drum up support for the package. The worsening divide has become more apparent when Tsang said to the faces of opponents at a shopping centre during a street campaign in summer 2010, “you are the minority; you should listen to what we the majority want.” The Act Now campaign has drawn mixed reaction in the society. Proponents praised the Tsang team for “lowering their posture” to get the support of the people for the electoral reform package. Critics and cynics dubbed the exercise as a poorly-executed political show. The most memorable, and controversial, political move by Tsang during the battle over the reform blueprint was his initiative to invite Civic Party leader Audrey Eu Yuet-mee to a televised debate on the package in June 2010. The format of the watershed debate was in resemblance to the American presidential election debate, which featured a contest of political stars like Bill Clinton and George W. Bush. Less than 10 minutes into the debate, results of simultaneous telephone survey commissioned by paid television broadcaster and carried on the live broadcast showed Tsang was roundly beaten. Commentators and newspapers concurred the Chief Executive lost miserably. The embarrassing episode says something about the dilemma of Tsang. He understands he needs to act presidential by venturing into such high-risk political acts as a live debate with arguably the most charismatic and eloquent opposition leader, namely Audrey Eu. This is despite the fact that he has and is never a street-fighter politician, who has gone through the baptism of fire in democratic elections.

7.  The Straightjackets of “One Country, Two Systems” After more than one and a half century of colonial rule, Hong Kong reverted to Chinese sovereignty at the stroke of midnight on 1 July 1997. Under the policy of “Hong Kong people ruling Hong Kong”, Hong Kong people have become the masters of their own house. Except for

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defense and foreign affairs, Hong Kong people are given a high degree of autonomy in running their domestic affairs. The Chief Executive is both accountable to the Central People’s Government and the people of Hong Kong. He enjoys a unique position in the Chinese hierarchy. There are good reasons to believe the Chinese Communist Party meant what they said when they commented Hong Kong people know better than anyone in running the city. Given national pride and dignity are at stake, the Chinese authorities are keen to show Hong Kong Chinese would be able to do an equally good, if not even better, job than the British rulers in prolonging the Hong Kong success story. In view of the deep-rooted anxieties about the communist regime, Beijing is also anxious to demonstrate to Hong Kong people and the international community they would not pull the strings behind the scenes. That being said, the Chinese government has given constant reminders to the people of Hong Kong the city is not an independent political entity. The chief executive needs to pay dual allegiance and accountability to both the central government and Hong Kong people. Against the post-1997 constitutional and political order, what role Beijing wants the chief executive to play is by no means clear. The simple question is: should he or she be a political leader, in its full sense, or just an administrator? The answer is not all that clear 15 years after the handover. Remarks made by Wang Guangya, China’s senior official in charge of Hong Kong affairs, in August 2011, have shed some light on Beijing’s thinking. He said at a meeting with a group of university students from Hong Kong in Beijing the city’s civil servants lacked visions and have not done enough longterm planning for the city. Civil servants, he lamented, have no ideas about how to solve the city’s practical social, economic and political problems by taking into the overall situations. Wang said: “They don’t know how to be the bosses, the masters”. It was seen as a veiled criticism against Tsang in view of his civil service background. The message given by Wang is clear: Tsang lacked a sense of crisis, visionary ideas and strategic thinking to anticipate problems and find solutions, address present issues and plan for the future. That Tsang saw his appointment as a job he would strive to get it done is widely seen as indicative of the mind-set of civil servants. It sounds like a Freudian slip when Tsang concluded in his declaration speech for his re-election bid on 1 February 2007. He said:

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“As Chief Executive, I will create a better new Hong Kong for our new generation and for the people of our city. Today, I still remember what I said to myself when I joined the civil service 40 years ago: ‘I will get the job done’ ”. [19]

His “boss-servant” mind-set has been manifested in his body language when he met with mainland Chinese officials and leaders in Beijing. Television news footage of him listening attentively and taking down notes carefully on what state leaders such as President Hu Jintao had to say has reinforced the public perception of him being a loyal servant. It is also open secret that he had addressed to the former Hong Kong and Macau Affairs Office Director Liao Hui as “laoban”, or boss, when they met although they enjoyed a similar rank in the Chinese hierarchy. The excessive show of humbleness of Tsang when dealing with Beijing officials has weakened his role and position as a champion of the interest of Hong Kong people when it comes to issues such as democratic development where the city and the central government do not see eye to eye. On its face, the thinking and principle behind the policy of “one country, two systems” are simple and clear. But when it comes to reallife issues, the interactions between the Mainland and Hong Kong have become more complex. Caught between two bosses (Beijing and Hong Kong), Tsang was in a dilemma when he handled issues that hinged upon the complexities of Mainland–Hong Kong relations. The positioning of Tsang has become trickier in the wake of the July 1 rally in 2003, which saw over 500,000 people took to the streets to vent out their grievances towards the then Tung administration. The rally has heralded a new phase in Beijing’s strategy towards Hong Kong. Instead of taking a handsoff approach, Beijing has adopted a more proactive role in Hong Kong affairs. Politically, the central government’s Liaison Office in Hong Kong has stepped up its united front work in the city. There were more private contacts with political parties. It is open secret that various Chinese bodies have sent research teams to visit Hong Kong to meet with a wide range of people including politicians, journalists and academics to get a more

19. Chris Yeung column published on www.hkej.com on 1 August 2011.

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comprehensive picture of Hong Kong. The economic relations between the mainland and Hong Kong grew closer after China’s entry into World Trade Organization in 2001 and the outbreak of SARS crisis, or severe acute respiratory syndrome in 2003. Beset by the Asian financial crisis in 1998 and the bursting of the information technology bubble in 2000, Hong Kong economy was badly in need of fresh impetus. Beijing’s supportive policies including the Closer Economic Partnership Arrangements and relaxation of restrictions for mainland visitors to Hong Kong have helped rejuvenate the Hong Kong economy. The increasingly economic dependency of Hong Kong on the mainland has brought about profound impacts on mainlandHong Kong relations, nevertheless. The Tsang administration has been ridiculed for constantly “begging for favours,” or supportive policies, from Beijing, thus denigrating the status of Hong Kong as the premier city in China. When it comes to the soft power of Hong Kong in areas such as freedoms, democratic rights and openness, the record of Tsang in playing the leadership role in upholding the Hong Kong values has faced increasing challenges in recent years. One damaging case in point was the police force’s handling of the protests during the visit of former Chinese Vice Premier Li Keqiang in August 2011. One incident involved a resident, who was wearing a T-shirt emblazoned with “June 4” message, being taken away by police officers when he took a walk in a residential estate where Li was paying a home visit. Critics fear it was not an isolated incident, but indicative of the subtle changes within the police. Once dubbed by a prominent journalist as Asia’s finest, the police force under the leadership of the commissioner Tsang Wai-hung faced ridicule that they have become the mainland Chinese gong’an, or public security officers. With China growing from strength to strength and the party leadership taking a more proactive approach in handling Hong Kong affairs, any chief executive looks doomed to be handed a tough job. He or she needs to play brinkmanship in order to win the hearts and minds of Hong Kong people while securing trust and support from Beijing. Arguably, Tung might have been in a much stronger position acting as a champion of Hong Kong interest when dealing with the Beijing leaders in view of his long-time ties with, and high respect and trust from Beijing leaders. Contrarily, Tsang took up the top post under extraordinary circumstances. It looked highly

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unlikely that he would have taken the helm in 2012 if C. H. Tung had been allowed to complete his second term as originally planned. And in light of his long-time connections with the former British colonial government, it is not surprising that his loyalty might have been questioned in some quarters of the Chinese government and the pro-Beijing circle in Hong Kong. Some political analysts and watchers have argued Tsang might have never been fully trusted by Beijing. If that is not far from the truth, Tsang would have found him walking on thin ice and felt less confident and more unsure when he handled matters that hinged upon the interest of Beijing. The room for flexibility in his political maneuvering with Beijing might be more limited that Tung’s. Sympathisers may have a point to argue Tsang is doomed to be a caretaker chief executive, not a leader who can genuinely lead the people according to his own vision and plans.

8.  The Verdict It may sound unfair. It is inevitable that Hong Kong people will make judgment on the leadership, or the lack of it, of Tsang by, among other criteria, comparing him with his predecessors both after and before the handover. Lord MacLehose has been widely hailed as a leader with farsightedness, can-do spirit and decisiveness. Though his hands were tied up with the 1997 talks, late governor Edward Youde was remembered for his easygoing style and whole-hearted dedication to serve the Hong Kong people. (He died of a heart attack in office.) Lord Wilson oversaw a series of confidence-building measures featuring the “rose garden” airport and airport-related infrastructure projects and university education plans in the wake of the June 4 shockwave. Although last governor Chris Patten’s belated plan to boost the democratic elements in the 1995 Legco ended nowhere, his “mingle-with-the-people” style and approach have drastically changed the city’s political culture. His calls for fair and open elections, openness and transparency in governance have set the standards that the post-handover leaders found it difficult not to follow. Despite the harsh words against Tung’s governance, even his critics have no doubts about his commitment and sincerity in serving for the people of Hong Kong. His major initiatives including economic integration with the mainland

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and education have received support from the society. He failed largely in policy implementation and handling of crisis such as SARS and Basic Law Article 23. Importantly, his integrity has never been in doubt. Few doubt about the smartness, capabilities and public service experience of Tsang. But his performance in leadership during his sevenyear rule has left much to be desired. A member of his cabinet has made scathing attack on Tsang’s rule at a private occasion, saying “there is no leadership… The team is worse than the Tung team”. Worse, the cabinet member said Hong Kong’s systems were “eroding”.[20] True, Hong Kong in 2011 was not the city in 2003 when public discontent reached its boiling point around July 1 that saw half a million people took to the streets. There is no denying a strong feeling of dissatisfaction, disappointment and disillusionment with the Tsang leadership prevailed across different sectors of the society. Although he could claim credit for the impressive economic growth and employment situation, he has not taken leadership to address a host of deep-seated conflicts in the society, which grew from bad to worse during his rule. They include the problem of working poor, housing bubbles, alleged property hegemony, lack of new engines of growth, slow pace of democratic elections and flaws in the political structure. From a personal perspective, he has failed to set a good role model of leadership in terms of values and standards. Cases are aplenty. His “friend-foe” approach makes a mockery of his pledge of leading an inclusive government. More recently, the increasing curbs on media’s reporting activities have raised questions about their commitment to openness and accountability. Importantly, his band-aid approach in governance that focused on finding quick-fixes to immediate problems, not long-term policy solutions, shows a lack of leadership, which is primarily about addressing difficult issues and fundamental causes of the problems and biting the bullets to make tough decisions. Tsang’s decision to promote the most unpopular minister Stephen Lam Sui-lung to become the Number Two man after the resignation of Henry Tang Ying-yen from the post of chief secretary in 2011 has raised serious questions about his political beliefs and ethical standards. Also in 2011, he was embroiled in

20. From an off-the-record session attended by a Donald Tsang team member.

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a controversy over illegal structures found in his apartment in Mid-Levels. He had first insisted it was not illegal. Only after fierce public criticism he agreed to re-fix it. That he failed to win high moral ground has deepened the feeling of cynicism among his critics towards him. The list goes on. Tsang did acknowledge Hong Kong has no shortage of difficult problems. In his swansong policy address, he said there are major economic, livelihood and political challenges for Hong Kong, “which cannot possibly be fully overcome by the current-term government within a short time.” He admitted whether Hong Kong can overcome the challenges in future will have profound implications. The challenges, he said, include the role of government, ageing population and political reform.[21] Whether he has made serious efforts to tackle the challenges is in the eyes of beholder. Critics have a point to argue Tsang, who is vested with enormous powers under the present political system, can make things happen. It is also inconceivable that the central government has and could micro-manage Hong Kong affairs, therefore hampering his effort to get his job done. Simply put, he should have ample room for political maneuvering to do more and do better. His supporters and sympathisers could argue, however, any chief executive is in a no-win situation having to serve two masters, namely Beijing and Hong Kong. Faced with a flawed political system and increasingly tough, at times hostile, socio-political environment, the SAR chief can never get things done regardless of his or her capabilities and political will. Tsang said in his last policy address: “As for my performance as the chief executive, that will be for the public to judge”. In his re-election campaign speech in 2007, he has vowed to “get the job done”. The 210-paragraph policy address aside, he published a separate booklet to list out the jobs done in his term. Facts speak louder. According to a poll conducted by the Chinese University’s Institute of Asia-Pacific Studies in August 2011 and published in October 2011, 69.5% of respondents are dissatisfied with the performance of the government, up from 35.9% in a

21. See 2011–12 Policy Address at www.ceo.gov.hk.

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similar poll conducted in October 2007. In the 2011 survey, 60.8% are not happy with the economic situation and 67.7% dissatisfied with the social situation. The corresponding figures in 2007 were 29.1% (economic) and 39.1% (social) respectively.[22] Speaking at his last question-time at Legco on 14 June, Tsang admitted his administration “fell short of expectations”. “There were misjudgments and strays in (policy) implementation.”.[23] Of the 173 policy initiatives he had pledged, he claimed success in accomplishing all except for four. Hong Kong people tend to be kind to their leaders. Presiding over a period of almost-unstopped economic growth and low unemployment rate in post-1997 Hong Kong, some people may agree Tsang has done his job. No less, but also no more. Many, however, feel adamant Tsang should have done better in tackling some of the chronic, deep-seated problems facing Hong Kong. They include rich-poor gap, economic restructuring, housing and medical services, pollution, population policy and, last but not the least, political reform. His reluctance to bite the bullet in finding long-term solutions to difficult issues, but seeking band-aid, short-term cure, has and will be seen as one of the major deficiencies in his 7-yearlong rule. Dubbed as a “smart Hong Kong boy”, Tsang had been hailed as a symbolic figure of Hong Kong success. Brought up from an ordinary family and reached the top post in the respected civil service before being elevated to the Number One, he had pledged to become a leader of the people. It could not be more ironic that he stepped down from the top post in the midst of a groundswell of public discontent over his intimate ties with the rich and the power.

22. Hong Kong Economic Journal, 20 October 2011-10-20. 23. South China Morning Post, 15 June 2012.

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C h a pt er 7

Governance and Public Policy under the Donald Tsang Administration Critical Voices from the Christian Community in Hong Kong [1] Shun-hing CHAN Associate Professor, Department of Religion and Philosophy Hong Kong Baptist University

1. Introduction In July 2011, the Civil Human Rights Front organised the annual 1 July March, with the theme of “Return the 2012 dual elections to the people, down with the property hegemony; and Donald Tsang steps down”. The Civil Human Rights Front organisers claimed a turnout of 218,000 people, which is supposedly the highest number since 2004.[2] In June 2012, the Public Opinion Programme of the University of Hong Kong released the findings of a survey indicating that support for the former Chief Executive, Donald Tsang, was as low as 39.3%, the lowest rating since June 2005. This rating is much lower than the 47.9% for the

1. An earlier version of this paper was presented at the 2011 Annual Conference of the Hong Kong Sociological Association. The author wishes to thank the participants for their helpful comments. 2. Fung, Fanny and Jennifer Ngo (2011), “Unpopular Tsang defends his record”, South China Morning Post, 2 July 2011.

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previous former Chief Executive, C. H. Tung, in March 2005.[3] Tsang became the Chief Executive of the Government of the Hong Kong Special Administrative Region (HKSAR) on 21 June 2005, taking the place of Tung, who resigned due to “health problems”. Tsang was re-elected for a third term as Chief Executive on 25 March 2007 and went on to serve Hong Kong people from 1 July 2007 to 30 June 2012. An evaluation of the Donald Tsang administration’s performance during his seven years in office should reveal the problems of governance in Hong Kong, as well as delineate future social reforms. This chapter will examine the views and comments of the Hong Kong Christian community on the governance philosophy and the policies of the Tsang administration from March 2005 to June 2012. The Concluding Remarks explicates the Christian community’s expectations for the new SAR government, and their perceived priorities regarding social problems that need to be solved in Hong Kong. In this chapter, the Christian community refers to both Catholics and Protestants, and their related social groups. In addition, the word “community” is used rather than “churches” because it has been primarily Catholic and Protestant social groups that have expressed their concerns about social issues in Hong Kong. Some of the organisations in the Catholic hierarchy, for example, the Justice and Peace Commission of the Hong Kong Catholic Church (HKJP) and the Hong Kong Catholic Commission for Labour Affairs (CCLA), represent the voice of the Catholic Church when taking part in debates on social issues. It is noteworthy that the HKJP is an official organisation under the Catholic Diocese of Hong Kong, and its staff members report their duties directly to the Bishop of Hong Kong. Therefore, the public statements issued by the HKJP represent de jure the position of the Catholic Church. However, Catholic priests in different parishes may hold a variety of views on sociopolitical issues and some of them may not agree with the statements and position of the HKJP.

3. Public Opinion Programme, The University of Hong Kong. “Indicators on chief executive Donald Tsang Yam-kuen’s popularity — Combined charts”, http://hkupop.hku.hk/english/popexpress/ ce2005/3ind/index.html, and “Four indicators on CE’s popularity — Combined charts of positive measurements (monthly average)”, http://hkupop.hku.hk/english/popexpress/ceall/combined/poll/ index.html. Accessed 14 September 2012.

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Unlike the unified structure of the Catholic Church, the Protestant church is represented by a multitude of denominations and independent churches. Generally, church pastors are preoccupied by their church administration and pastoral works, as social engagement is not their primary concern. Many church leaders avoid sensitive issues, such as institutional reform and human rights, which they may perceive as challenging the authority of the Chinese government. Protestant social groups most often give voice to socio-political issues. These groups are often established by progressive individual Protestants rather than by denominations or churches. Pastors who hold a conservative view or political position keep a distance from these social groups. The data used in this chapter come mostly from Catholic and Protestant social groups, such as the HKJP, the Justice and Social Concern Committee (JSCC) of the Hong Kong Christian Council (HKCC) and the Hong Kong Christian Institute (HKCI). Their publications, submissions and public statements are the main source of information in this chapter, representing the views of the Christian community in Hong Kong. In addition, articles published by the Catholic newspapers The Sunday Examiner and Gongjiao Bao (《公教報》) and the Protestant newspaper Christian Times (《時代論壇週報》) are also quoted. These articles are useful for understanding Christian perspectives on the performance of the Tsang administration and their expectations for the Leung administration.

2. On Governance Philosophy Catholic and Protestant social groups regularly express their views and suggestions, which are mainly critical of the governance philosophy of the Tsang administration, in response to the Policy Address and the Budget.

2.1 Hindering Institutional Development Over the years, the government has issued a number of decrees aimed at hindering institutional development in Hong Kong. Some of these have been reiterated as the “principles” of “meeting the interests of different sectors of society”, “facilitating the development of the capitalist

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economy”, “gradual and orderly progress” and “developments appropriate to the actual situation in the Hong Kong SAR government”.[4] In “A Response to the Green Paper on Constitutional Development” (2007), the HKJP criticised the government for not providing a civic education to nurture Hong Kong people’s sense of citizenship and democracy. On the contrary, the government repeatedly reminded Hong Kong people that their right to participate in elections is granted by the central government, rather than based on the international covenants of rights which every citizen enjoys. The government used many distorted “principles” and “concepts” in the consultation paper, which was aimed at persuading Hong Kong people to accept the dominance and arrangement of the central government.[5]

2.2 Slanting towards the Business Sector The government’s blueprint for economic development has overwhelmingly focused on high value-added industries, such as the banking, finance and real estate sectors, which have little benefits to the working class. For example, in the 2008–09 Budget, the government lowered the tax rate on corporate profits and reduced different business tax rates to the amount of HK$21.61 billion due to the global economic crisis, and yet the government gave only HK$5.67 billion to support the poor and disadvantaged. In 2008, five Catholic and Protestant social groups issued a joint statement entitled “A Christian Response to the 2008 Policy Address under the Financial Tsunami” (2008), criticising the government for slanting towards the business sector and failing to employ measures at the institutional level to help the poor and disadvantaged. They suggested that the government should introduce a more diversified structure of industries, particularly labour-intensive industries that use middle- or low-level technology. Such industries could create job opportunities for the poor and disadvantaged. They also suggested that the government should employ

4. The Hong Kong SAR government (2007), Green Paper on Constitutional Development, 11 July 2007, www.cmab.gov.hk/doc/issues/GPCD-e.pdf. Accessed 16 September 2012. 5. HKJP (2007), “A response to the green paper on constitutional development”, 4 September 2007, www.hkjp.org/statement.php?id=68. Accessed 16 September 2012.

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just and fair criteria for allocation of resources, so that more resources could be distributed to the working class.[6]

2.3 Shirking Responsibilities in Economic Activities Over a long period, the government has upheld the philosophy of “big market, small government”. It was originally purported to be a policy for the creation of favourable conditions to decentralise power and to encourage the participation of the grassroots and private sectors in the hope that economic activities and decisions could be integrated into society. The Catholic Church of Hong Kong, in its statement entitled “Some Expectations about the Future SAR Government Envisioned by the Catholic Church in Hong Kong” (2012), criticised the government for using the principle of “market leads, government facilitates” as an excuse, shirking its responsibilities and refraining from intervening in economic activities. The Catholic Church urged the government to formulate effective policies and measures to balance the excesses of the market’s economic activities, so that common good could be ensured and the poor could lead a dignified and sustainable life.[7]

2.4 Cronyism in Recruiting Members into Advisory and Statutory Bodies The government constantly seeks advice from a number of advisories and statutory bodies in the policy-making process. Every policy should reflect the interests of a wide cross-section of the community. There are certain principles concerning appointments to advisories and statutory bodies, namely, the “six-year rule” and the “six-board rule”. The “six-

6. The five Catholic and Protestant social organisations are the HKJP, CCLA, JSCC, HKCI and Christians for Hong Kong Society. See their joint statement, 2008. “A Christian response to the 2008 policy address under the financial tsunami”, 24 October 2008, www.hkcidata1.org/database/ claims/2008/claims081024.html. Accessed 16 September 2012. See also the JSCC. 2009. “Submission on the policy address of 2009-10”.October 2009, www.hkcc.org.hk/acms/content.asp ?site=hkcc&op=showbyid&id=1887. Accessed 16 September 2012. 7. The Catholic Diocese of Hong Kong. 2012. “Some expectations about the future SAR government envisioned by the Catholic Church in Hong Kong”, Sunday Examiner, 19 February 2012, pp. 11–12.

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year rule” refers to the statute stating that a non-official member cannot be appointed to serve on the same body in any one capacity for more than six years. The “six-board rule” refers to another statute stating that a person cannot be appointed to serve as a non-official member on more than six advisory and statutory bodies at any one time. Since 2005, the JSCC has criticised the government for listening to only one side, namely the rich and powerful, in its continued responses to the Chief Executive’s Policy Address delivered annually. In its 2010 statement, the JSCC expressed concern over the government’s frequent appointment of members from pro-government parties and their related organisations to the advisory and statutory bodies, which often violated the “six-year” and “six-board” rules. The JSCC criticised the Tsang administration for allowing cronyism, and damaging the independence and credibility of the advisory and statutory bodies, which cannot truly represent the interests of a cross-section of the community.[8]

3. On Public Policies Catholic and Protestant social groups have been working together to shape public policies in Hong Kong. The following sections will examine their views based on three categories, namely institutional development, human rights and the livelihood of the people.

3.1 Institutional Development During the period between 2005 and 2012, the government published three consultation papers on institutional development, which were The Fifth Report of the Constitutional Development Task Force (2005), the Green Paper on Constitutional Development (2007) and Methods for Selecting the Chief Executive and for Forming the Legislative Council in

8. See the JSCC’s submissions to the Policy Address and Budget from the years 2005 to 2011, particularly the submission for the year 2010–11.

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2012 Public Consultation (2010). Catholic and Protestant social groups issued critical comments in response to each of these consultation papers.

a. The fifth report of the constitutional development task force In November 2005, the government published The Fifth Report of the Constitutional Development Task Force. However, the report did not provide direction, timetable, steps and procedures for universal suffrage. During that time, the pan-democrats in the Legislative Council were indecisive over whether they should support the report. On 7 November, eight Catholic and Protestant social groups called a press conference, expressing their opposition to the report. On 2 December, they issued a joint statement entitled “A Christian Joint Statement on the Fifth Report” and published it in the Apple Daily, in which they criticised the proposal as “unfair, unjust, and violating the principles of democracy”. They urged the government to withdraw the report and “to reformulate a new proposal allowing universal suffrage for the Chief Executive and Legislative Councillors”.[9] The voices of the Catholic and Protestant social groups helped unite the indecisive pan-democrats, who eventually formed a common stance rejecting the government’s proposal in the Legislative Council that year.

b. Green paper on constitutional development In July 2007, the government published the Green Paper on Constitutional Development, providing the options, roadmap and timetable for implementing universal suffrage for the Chief Executive and the Legislative Council. However, the paper only provided different options and lacked a full explanation of the government’s ideas for future constitutional reform. In September 2007, the HKJP issued a statement entitled “A Response to the Green Paper on Constitutional Development”,

9. “Christian joint statement on the fifth report”, 4 November 2006, www.hkjp.org/statement. php?id=63. Accessed 16 September 2012. The Catholic organisations include the HKJP and St. Mary’s Parish Social Concern Group in Hung Hom, whereas the Protestant organisations include the HKCC, HKCI, Christians for Hong Kong Society and the Student Christian Movement of Hong Kong.

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criticising the government for putting off universal suffrage and demanding that the government implement direct elections for the Chief Executive and Legislative Council members in 2012. The statement also urged the government to reformulate a new Green Paper on Constitutional Development, explaining fully the government’s proposal and the direction of constitutional development.[10] In September 2007, the JSCC also sent its submission to the government in response to the Green Paper on Constitutional Development. In its submission, the JSCC reiterated its position, which was “to support a wellplanned and substantive move aiming at the ultimate goal of universal suffrage … the SAR government should implement universal suffrage in Hong Kong not later than 2012”. The JSCC provided a proposal for constitutional reform: Regarding universal suffrage for the election of Chief Executive, the composition of the Election Committee should be increased to 1,600 members and the government should not appoint District Council members to the Nominating Committee. Regarding the number of people in the election, there should be no upper limit on the number of candidates, but the upper limit for the number of nominations should be 120; universal suffrage should be implemented for the Chief Executive following the nomination procedure. Regarding the roadmap and timetable, the Nominating Committee should be formed and universal suffrage should be implemented in 2012. Regarding the composition of the Legislative Council, the number of seats should remain at 60, and geographical constituencies should replace functional constituencies through direct elections.[11]

c.

Methods for selecting the Chief Executive and for forming the Legislative Council in 2012 public consultation

In November 2009, the government published Methods for Selecting the

10. HKJP (2007), “A response to the green paper on constitutional development”, 4 September 2007, www.hkjp.org/statement.php?id=68. Accessed 16 September 2012. 11. JSCC (2007), “Submission on the green paper on constitutional development”, The Gospel Herald, 10 October 2007, www.gospelherald.com.hk/utf8_files/template/news_view_beta. php?code=gen&id=1046. Accessed 16 September 2012.

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Chief Executive and for Forming the Legislative Council in 2012 Public Consultation. This consultation paper did not explain fully the long-term constitutional reforms, the election process and the roadmap for selecting the Chief Executive in 2017 and for forming the Legislative Council in 2012. In January 2010, the JSCC issued a statement criticising the government for being unreasonable and irresponsible in asking citizens to discuss and make decisions without providing them with a blueprint for constitutional reform. The committee urged “the SAR government to publish a new consultation paper, providing information in detail regarding the election process and roadmap for selecting the Chief Executive and forming the Legislative Council”.[12] The HKCI and a group of evangelical Protestants also expressed their concerns over the dual elections. Their demands for constitutional reform are somewhat similar, in that they both suggested that universal suffrage should be implemented in the election of the Chief Executive in 2017, the Election Committee should be abolished, universal suffrage should be implemented in the election of the Legislative Council, and functional constituencies and the appointment system of the District Council should be abolished.[13]

3.2 Human Rights Since 2005, many human rights issues have been debated in society. The major issues include discrimination on the ground of sexual orientation or race, domestic violence, police infringement of citizens’ rights, and the right of abode for children of Hong Kong citizens. Both the Catholic and the Protestant groups expressed their views regarding a number of issues and took part in the respective debates.

12. JSCC (2009), “Response to the public consultation on the methods for selecting the chief executive and for forming the legislative council in 2012”, 19 January 2009, www.hkcc.org.hk/acms/content.a sp?site=hkcc&op=showbyid&id=2609. Accessed 16 September 2012. 13. HKCI (2010), “Submission on methods for selecting the chief executive and for forming the legislative council in 2012 public consultation”, 19 January 2010, www.hkcidata1.org/database/claims/2010/ claims100119.html. Accessed 16 September 2012. See also the joint statement published by evangelical Protestants. 2010. “Protestant public statement on universal suffrage”, Ming Pao, 19 February 2010.

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a.

Sexual orientation discrimination

In 2001, the United Nations’ Committee on Economic, Social and Cultural Rights criticised the subcommittee of the Panel on Home Affairs in Hong Kong Legislative Council for failing to frame sexual orientation as a question of human rights. In October 2005, the Home Affairs Bureau hired a market and social research firm to conduct a survey on public attitudes towards homosexuality, and explored whether an ordinance against sexual orientation discrimination should be introduced in Hong Kong based on the findings. The Protestant groups were deeply divided over the formulation of an ordinance against sexual orientation discrimination.[14] Organisations that supported the move formed the “Protestant Concern Groups against Sexual Orientation Discrimination Legislation”. For example, the HKCI published a series of articles in its journal Reflection, explaining why an ordinance against sexual orientation discrimination is necessary. Organisations that opposed the move also staged campaigns to deter the legislation. For example, the Society for Truth and Light provided their arguments in their publication Candlelight Network, persuading evangelical Protestants to take part in their counter-movement.[15] The SAR government decided to make the sexual orientation discrimination legislation a pending issue that year. On 14 May 2005, the United Nations’ Committee on Economic, Social and Cultural Rights expressed its concern once again over the exclusion of sexual orientation discrimination in the anti-discrimination ordinance in Hong Kong.[16]

b.

Domestic violence

In 2007, the government submitted the “Domestic Violence (Amendment) Bill” to the Legislative Council, which aimed to extend the coverage of

14. See a series of articles under the theme “Sexual orientation legislation”. (January 2005) Reflection,  p. 93. 15. March 2005. “Reflection on sexual orientation discrimination ordinance”.Candlelight Network 8(2). 16. Hong Kong Human Rights Monitor (2005), “Sexual orientation and human rights in Hong Kong”, 20 May 2005, www.hkhrm.org.hk/PR/exesummarychi.htm. Accessed 16 September 2012.

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the Domestic Violence Ordinance (1986) to include persons formerly in spousal or cohabitational relationships, their children, and other extended familial relationships. The Bill was passed and enacted on 1 August 2008. In December 2008, the government proposed an amendment to the Domestic Violence Ordinance to include cohabitation between persons of the same sex. The Catholic and Protestant groups were again divided on the proposed amendment. On 26 June 2008, the Society for Truth and Light sent a letter to Matthew Cheung Kin-chung, Secretary for Labour and Welfare, expressing its opposition to extending the coverage of the Domestic Violence Ordinance to include cohabitation between persons of the same sex. In the letter, the society criticized the government body because while it denies same-sex relationships as being equal or similar to marriage, it is extending the coverage of the Domestic Violence Ordinance to include same-sex relationships, although the coverage of the ordinance applies only to people who are married or have a relationship similar to marriage…[This] sends the wrong message to the public in that by extending the ordinance, the government considers relationships between persons of the same sex as constituting a family, which indirectly endorses same-sex marriage, civil unions, or any relationships between same-sex companions.[17]

The society suggested that the government should change the name of the Domestic Violence Ordinance to “Family and Home Violence Ordinance” or “Intimate Relationships Violence Ordinance”, so that it would also cover relationships between persons of the same sex.[18] On 20 January 2009, the JSCC issued a statement entitled “Views on the Domestic Violence (Amendment) Bill”, criticising the Society for Truth and Light for misunderstanding the Ordinance, including: (1) In English, the name of the ordinance is “Domestic Violence Ordinance”, not “Family

17. Fu, Tan-mui (2008), “The domestic violence (amendment) bill seeks path to be passed secretly next year: Indirectly legalising same-sex marriage”, Candlelight Network 11(4):22–3. 18. Choi, Chi-sum (2009), “To create a win-win situation for the domestic violence ordinance”, Candlelight Network 12(2):17.

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Violence Ordinance”, and the spirit of the ordinance not only covers couples in marriage but also deters harassment among persons in intimate relationships; and (2) the controversial phrase “as it applies to marriage” does not mean that cohabitating relationships are the same as marriage, but the coverage of the ordinance also applies to cohabitating couples. The JSCC stressed that the definition of the word “domestic” is not the main point of the issue, and the amendment of the ordinance should not be delayed. The JSCC also suggested that the name of the ordinance could be changed to “Home Violence Ordinance” or “Family and Cohabitating Relationships Violence Ordinance”.[19] The SAR government called a public hearing, taking into consideration the opinions of different organisations, and changed the name from “Domestic Violence Ordinance” to “Domestic and Cohabitation Relationships Violence Ordinance”. The new name extended the coverage of the ordinance to people in cohabitational relationships and differentiated between family and cohabitating relationships. The amendment was accepted by the various organisations, and the Bill was passed in the Legislative Council on 16 December 2009.

c.

Abuse of police power

Police power has been a controversial issue in Hong Kong that has intensified in the last decade. In December 2005, the sixth Ministerial Conference of the World Trade Organization was held in Hong Kong. During this time, the police arrested demonstrators who came from South Korea, Taiwan and Japan, and they slapped and strip-searched the demonstrators in detention rooms. In October 2007, 15 demonstrators who demanded democratic urban planning for Lee Tung Street were arrested and then strip-searched in detention rooms, where they were detained overnight. In July 2008, the HKJP issued a statement criticising the police force for abusing its power, and the organisation called for the government to safeguard the rights and dignity of Hong Kong citizens. The statement held that the Police General Orders allow the police to strip-search

19. JSCC (2009), “Views on domestic violence (amendment) bill”, 20 January 2009, www.hkcc.org.hk/ acms/content.asp?site=hkcc&op=showbyid&id=695. Accessed 16 September 2012.

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detainees repeatedly when they were being taken in and out of a detention room. The police can exercise coercion by force, and the detainees may be charged with obstruction if they refuse to cooperate. The HKJP pointed out that although the Independent Police Complaints Council (IPCC) has a responsibility to monitor the police, it has no investigative power, no authority of res judicata and no right of disposition. Hence, the IPCC is, in fact, unable to confront the police if there is abuse of power.[20] From 2010 to 2012, the police exercised excessive power over demonstrators in a number of rallies, including the incident of Vice Premier Ki Keqiang’s visit to the University of Hong Kong in 2011. The situation has been deteriorating and the government has not provided effective measures to solve the problem.

d.

Controversy over the right of abode

The human rights of new immigrants from mainland China, particularly the right of abode for the spouses and children of Hong Kong citizens, have been a central issue in Hong Kong in the last two decades. The HKJP asserts that the reunion of family is a basic human right, and new immigrants have been deprived of this right by the population policy of the government. The organisation criticised the policy for ignoring the principle of “one country, two systems”, and for creating social divisions between local citizens and new immigrants from mainland China. Jackie Hung of the HKJP has been assisting the new immigrants in claiming their right of abode since 1999. For example, she has been urging the officials of the Security Bureau to discuss with government bodies in mainland China a proposal raised in 2002, which is to create a new category of quota for the spouses and children of Hong Kong citizens whose right of abode was denied in the Court of Final Appeal in 1999. In December 2008, the House Committee of the Legislative Council formed a subcommittee to study issues relating to Mainland–Hong Kong families. The HKJP issued a submission to the subcommittee expressing the following demands in March 2009: (1) The Secretary for Security,

20. HKJP (2009), “Views on police general orders”, 1 July 2008, www.hkjp.org/statement.php?id=1. Accessed 16 September 2012.

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Ambrose Lee, should explain to Hong Kong citizens the arrangement for the newly added quota category and outline its timetable and goals in detail; (2) he should report to the Hong Kong people and the Legislative Council the content and detail of his meetings with government bodies in mainland China; and (3) he should meet regularly with representatives of the organisations concerned who are stakeholders of the right of abode, taking into consideration their difficulties and worries.[21] The campaign for the right of abode launched by the HKJP and other organisations finally yielded a result. On 14 January 2011, the Ambrose Lee, as Secretary for Security, announced in Beijing, that starting on 1 April, adult mainland-born children can apply for a single-entry permit that allows them to come to Hong Kong to be reunited with family. This classification refers to mainlanders whose cases were disqualified once they passed the age of 14 during the period of application.

e.

Race discrimination

According to the Census and Statistics Department, 342,198 people of ethnic minority lived in Hong Kong in 2006, constituting 5% of the total population.[22] Ethnic minorities have often faced varying degrees of discrimination in Hong Kong. The government launched a consultation on race discrimination in September 2004, and introduced the Race Discrimination Bill to the Legislative Council in December 2006. In December 2007, four Hong Kong church leaders, Cardinal Joseph Zen Ze-Kiun of the Catholic Church in Hong Kong, Metropolitan Nikitas Lulias of the Patriarch Athenagoras Orthodox Institute, Reverent Ralph Lee Ting-sun, General Secretary of the HKCC, and Bishop Thomas Soo Yee-po, chairperson of the HKCC, issued a joint statement on the race discrimination legislation. The statement criticised the limited coverage of the bill, which in many areas the government was excluded. The

21. HKJP (2009), “Submission on the right of abode for mainland-born children of citizens in Hong Kong”, 14 March 2009, www.legco.gov.hk/yr08-09/chinese/hc/sub_com/hs52/papers/ hs520319cb2-1129-2-c.pdf. Accessed 16 September 2012. 22. Census and Statistics Department (2007), Hong Kong 2006 Population By-Census Thematic Report: Ethnic Minorities. Hong Kong: Author, p. 5.

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church leaders also expressed their concern over education and translation services provided to ethnic minorities, and they urged the government to provide resources to overcome discrimination in these two areas.[23] In June 2008, the HKJP and the HKCI issued a joint statement on the race discrimination legislation. The statement demanded that, firstly, the sentence “This Ordinance applies to an act done by or for the purposes of the government” in Article 3 of the consultation paper should be changed to “It is considered a violation of law if the government discriminates against persons of different races when it is performing its function or exercising its power”. Secondly, exceptions should not apply to the government or public sectors, such as medicine, education, vocational training, social welfare, judiciary, legal aid, housing and labour, regarding the “Exception for languages” in Article 58. They stressed that the government and public sectors have a responsibility to provide information in Chinese and English for users of services, and translation services should be provided for ethnic minorities. The statement also suggested that the coverage of the bill should be extended to overseas workers and new immigrants from mainland China. The two organisations explained that, for example, the “two-week stay limit at the end of their employment contracts” creates difficulty for overseas workers. In addition, they are not able to defend themselves if there are labour disputes. The ordinance should define such administrative measures as discrimination against overseas workers. Furthermore, new immigrants from mainland China should be considered a minority group because their characteristics, such as language, appearance and habits, are different from those of local people. Therefore, the coverage of discrimination should be extended to new immigrants.[24] The Race Discrimination Bill was passed in the Legislative Council on 10 July 2008. Although not all amendments suggested by the Catholic

23. “Christian leaders issued joint statement on assisting ethnic minority”, Christian Times, 16 December 2007, http://christiantimes.org.hk/Common/Reader/News/ShowNews.jsp?Nid=44500&Pid=2&Versi on=1059&Cid=592&Charset=big5_hkscs. Accessed 16 September 2012. 24. HKJP and HKCI (2008), “Christians’ joint statement on race discrimination legislation”, 1 June 2008, www.hkjp.org/statement.php?id=4. Accessed 16 September 2012.

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and Protestant social groups were considered during the consultation, the “exception for languages” for government bodies was overruled. In other words, public and private sector organizations should provide translation services to ethnic minorities, including vocational training institutions and medical services, after the legislation is implemented.

3.3 The Livelihood of the People Many social issues surrounding the livelihood of the people were fiercely debated between 2005 and 2012, which included labour protection; a review of the Comprehensive Social Security Assistance Scheme (CSSA); population policy; long-term social welfare planning in Hong Kong; the building of the Guangzhou–Shenzhen–Hong Kong Express Rail Link; and the eviction of the residents of Choi Yuen Village. Catholic and Protestant social groups took part in the debates, expressing their Christian values in the livelihood of the people.

a.

Labour protection

Labour protection has been a much-debated issue in Hong Kong due to the low wages received by workers in different sectors, such as cleaning workers and security guards. In August 2006, more than 30 social organisations formed the People’s Alliance for Minimum Wage, urging the government to introduce minimum wage legislation. The HKJP, HKCI, CCLA and Young Christian Workers were members of the alliance. On 11 October 2006, the Chief Executive, Donald Tsang, announced the launch of the Guaranteed Wage Movement in his policy address, attempting to protect cleaning workers and security guards through voluntary action rather than legislation. After three years, the Guaranteed Wage Movement was deemed a failure. In June 2009, the government published the Minimum Wage Bill for public consultation. In June 2010, the People’s Alliance for Minimum Wage issued a statement, asserting the minimum wage should not be lower than HK$33 per hour. In October 2009, the HKJP issued a submission on the Minimum Wage Bill, requesting the government to introduce the concept of “living wage” to the bill. The concept of “living wage” is central to Catholic social

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teaching. This concept is often used to describe the minimum hourly wage necessary for an individual to meet basic needs, including shelter and other incidentals, for an extended period. According to this concept, the criteria for a minimum wage should be calculated with reference to the living standards of Hong Kong society. The HKJP argued that the minimum wage may not provide the basic needs an individual requires. The organisation demanded that the lowest wage should not be less than HK$33 per hour.[25] In May 2010, the JSCC also issued a submission on the Minimum Wage Bill, with the following suggestions: (1) The Provisional Minimum Wage Commission should make the criteria for the minimum wage with reference to a series of indicators, including the economic conditions in Hong Kong, the labour market, competitiveness, living standards, etc. Among the indicators, preference should be given to “protecting and improving the basic needs of labour”. (2) The government should take into consideration the concept of a “family wage” with reference to the International Labour Organization. The idea of the “family wage” refers to a wage that is sufficient to support a family, including a dependent spouse and children. Therefore, the minimum wage in Hong Kong should not be lower than HK$33. (3) In addition to the minimum wage legislation, the government should provide more resources to support the implementation of the ordinance, such as a “short-term unemployment aid” for workers. In the long run, the government should consider establishing a “Universal Pension Scheme”.[26] The Minimum Wage Bill was passed in the Legislative Council on 17 July 2010 and the government set the initial minimum wage at HK$28 per hour on 10 October 2010. According to the proposals of the HKJP and the JSCC, the new goal for the labour protection movement is the introduction of a living wage or family wage in the future.

25. HKJP (2009), “Submission on minimum wage bill”, 8 October 2009, www.legco.gov.hk/yr08-09/ chinese/bc/bc61/papers/bc611007cb2-2571-40-c.pdf. Accessed 16 September 2012. 26. JSCC (2010), “Submission on minimum wage level legislation”,26 May 2010, www.hkcc.org.hk/ acms/content.asp?site=hkcc&op=showbyid&id=3519. Accessed 16 September 2012.

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b.

Debates on the comprehensive social security assistance scheme

Since 2004, the government has introduced a number of measures to deter new immigrants from mainland China from applying for CSSA. For instance, the Social Welfare Department introduced in 2004 a “requirement of residence” to the CSSA application, which stated that the applicant must be a Hong Kong resident for at least seven years. In 2005, the department further proposed to reduce the Single Parent Supplement when his or her child reached the age of six. The department also suggested that the reward should be given only to those who worked 32 hours a month with a minimum wage of HK$1,430. On 17 July 2005, five Protestant social groups launched a signature campaign in Mongkok, expressing their opposition to the proposal of reducing the Single Parent Supplement. They issued a joint statement criticising the proposal for failing to consider childcare as a form of unpaid work. If the proposal were to be implemented, single parents would have to work outside of the home, leaving his or her children unattended at home. The statement also criticised the government for failing to conduct a consultation on the policy, which would affect twenty thousand single-parent families in Hong Kong. They offered the following suggestions: (1) The government should shelve the proposal and launch a public consultation; (2) the government should conduct a survey regarding what kinds of jobs are available in the labour market and provide relevant training to those single parents; and (3) the government should provide childcare and youth services to single-parent families, allowing single parents to build relations with others in society.[27] In July 2006, the HKJP issued a statement criticising the “requirement of residence” for CSSA, in that it discriminated against new immigrants from mainland China. The statement argued that new immigrants have been helping the economy and development in Hong Kong, and they will

27. HKCI et al. (2005), “Christian statement on shelving the new proposal of CSSA for single parents”,18 July 2005, www.hkcidata1.org/database/claims/2005/claims0507a.htm. Accessed 16 September 2012. The five Protestant social groups are HKCI, Christians for Single Parent Families, A Generation, Christian Student Movement of Hong Kong, and the Fellowship of Social Concern at Shum Oi Church of the Church of Christ in China.

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make their own contribution in the long run. In addition, the government should review the immigration policy and treat immigrants fairly, ensuring that immigrants from mainland China have the same rights and duties as local people do.[28] The HKCI held a similar position. In June 2009, the HKCI issued a submission to the subcommittee on Poverty Alleviation, expressing its opposition to the “requirement of residence” stated in the CSSA application. In its submission, the HKCI argued that, firstly, the criteria are inconsistent with the population policy, which states the goal of developing a knowledge-based economy in Hong Kong. New immigrants from mainland China provide human resources to achieve this goal. Secondly, the restriction violates the spirit of CSSA; new immigrants who have financial needs are not able to receive financial aid due to the requirement of residence. Finally, the requirement of residence has a labelling effect on new immigrants, which deeply divides the society. The HKCI proposed to shelve the requirement of residence, to review the CSSA scheme, and to study the quality of life of those families receiving CSSA, so that the government could provide better financial aid and services to these families.[29] The divisions between local citizens and new immigrants from mainland China have intensified in the last decade. Groups organised by local people have expressed their opposition to new immigrants from mainland China, and some of these groups have uploaded their “manifestos” on the Internet and staged their opposition campaigns in the streets. For example, they smeared new immigrants as being “locusts”, meaning the new immigrants “eat up” the social welfare in Hong Kong like locusts. They also opposed the government’s inclusion of new immigrants in the “$6,000 scheme” in the 2011 budget year. On 6 March 2011, ten members of the group “Local Power in Hong Kong” joined a march or HK$6,000 to new immigrants from mainland China. On 10 April 2011, they organised their own march

28. HKJP (2006), “Submission on the residence requirement of CSSA”, 19 July 2006, www.hkjp.org/ statement.php?id=65. Accessed 16 September 2012. 29. HKCI (2009), “Submission on the review of CSSA”, 9 June 2009, www.hkcidata1.org/database/ claims/2009/claims090609.html. Accessed 16 September 2012.

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and took to the streets again.[30] The Leung administration should engage in this problem of social division and solve it on its own terms.

c.

Population policy

In 2003, Donald Tsang presented the Report of the Task Force on Population Policy to the Legislative Council when he was the Chief Secretary for Administration. He made 33 proposals on education, manpower, admission of mainland professionals and skilled workers, foreign domestic helpers, the elderly, etc. In October 2007, he presented the population policy again in the Policy Address when he became the Chief Executive. In the chapter “Optimising Our Demographic Structure and Attracting Talent”, he explained what the government had been doing and would do in the future. In 2007, the Catholic and Protestant social groups, together with other social organisations, formed the Concern Group for Population Policy. [31] In June 2008, the group sent a submission to the members of the Task Force on Population Policy criticising the policy for its narrow emphasis on economic interests, which would produce social exclusion. The group pointed out that many families in Hong Kong were separated between Hong Kong and mainland China, and the mainland wives were denied the right to access medical and delivery services. The population policy introduced in 2003 tightened the criteria for new immigrants applying for CSSA and public housing. These policies did not take the needs of the ethnic minorities into consideration. Furthermore, the policy neglected the difficulty middle-aged low-income women experienced in gaining employment, and there was no retirement security for the working class. The group suggested, firstly, the government should undertake a critical review of the Report of the Task Force on Population Policy published in 2003. Secondly, the government should take seriously the views of the

30. Lam Kay (2011), “The three-point manifesto opposing the new immigration policy in Hong Kong”, 11 April 2010, http://plastichk.blogspot.com/2011/04/blog-post_11.html. Accessed 16 September 2012. 31. There are 24 organisation members in the Concern Group for Population Policy, including the HKJP, HKCC, HKCI and Mission to New Arrivals.

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Concern Group for Population Policy during the consultation. Thirdly, the Task Force should meet with members of the group once every two months, discussing the questions raised by individuals and organisations on the issues related to population policy. Finally, the government should establish a mechanism to handle matters concerning the reunion of Hong Kong and mainland families.[32]

d.

Long-term social welfare planning in Hong Kong

In April 2010, the government published the consultation paper “Long-term Social Welfare Planning in Hong Kong”. Five social welfare organisations, together with 506 individuals and 15 other social organisations, published a joint statement entitled “Hong Kong People Concerned about the Long-term Social Welfare Planning in Hong Kong” in Ming Pao on 23 July 2010. The organisations consisted of four Catholic and Protestant social groups.[33] The JSCC and the HKCI added their names to the joint statement, but they also sent their own submissions to the government. The JSCC presented the following views on the consultation paper: 1. The consultation paper is correct in emphasising the role of family; however, it neglects the fact that the function of family is closely related to the situation of society. To strengthen the function of family, the government must deal with the structural problems of society. It should invite social service organisations to take part in the work and provide resources to support their programmes. The consultation paper also neglects women who are in vulnerable situations, and the government renders little support for ethnic minorities, the disabled and the elderly who are living alone. 2. The consultation paper suggests the introduction of the “user pays” principle, but this principle is in violation of the

32. Concern Group on Population Policy (2008), “Submission on population policy”, 23 June 2008, www.hkjp.org/statement.php?id=3. Accessed 16 September 2012. 33. The four Catholic and Protestant social groups are CCLA, HKCC, HKCI and Christians for Hong Kong Society.

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fundamental spirit of social welfare and will produce a labelling effect on those receiving social welfare. 3. The consultation paper proposes to encourage the business sector to take part in social welfare provision. This suggestion neglects the discrepancy between the values and goals of the business and social welfare sectors. 4. The consultation paper fails to recognise non-governmental organisations as stakeholders in long-term social welfare planning. The government should acknowledge the contribution of NGOs, review the principles for evaluation and funding of social welfare services, and provide sufficient training and support to social workers.[34]

e. The building of the Guangzhou–Shenzhen–Hong Kong rail express link and the eviction of Choi Yuen Village The government announced the construction of the Guangzhou– Shenzhen–Hong Kong Rail Express Link in 2009 and the eviction of households in the Shek Kong area, including the Choi Yuen Village. Catholic and Protestant social groups strongly opposed both the building of the Express Rail Link and the eviction of villagers. In April 2009, the HKJP and other organisations formed the Concern Group on Choi Yuen Village, and the group issued a statement criticising the government for depriving the villagers of their right to live in the village and causing the loss of their agricultural land. The statement also criticised the government for not conducting a consultation regarding the construction of the Express Rail Link, which exposed the undemocratic nature of urban planning in Hong Kong.[35] The HKCI also sent its submission to the Railway Subcommittee of

34. JSCC (2010), “Views on the consultation paper on long-term social welfare planning in Hong Kong”, 31 July 2010, www.hkcc.org.hk/acms/content.asp?site=hkcc&op=showbyid&id=4191. Accessed 16 September 2012. See also HKCI. 2010. “Submission on the consultation paper on long-term social welfare planning in Hong Kong”, 5 June 2010, www.hkcidata1.org/database/claims/2010/ claims100605.html. Accessed 16 September 2012. 35. Concern Group on Choi Yuen Village. 2009. “Railway, lives, and dignity”, 5 April 2009, www.hkjp. org/statement.php?id=75. Accessed 16 September 2012.

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the Legislative Council Panel on Transport on 23 September 2009. In the submission, the HKCI asserted that (1) the Guangzhou–Shenzhen–Hong Kong Rail Express Link was unnecessary, and the project would waste up to HK$63 billion; (2) the government did not conduct consultation on the project, ignoring public opinions on the issue; (3) the cost of construction of the Express Rail Link was too high, and its cost-effectiveness was questionable; and (4) the Environmental Impact Assessment of the Mass Transit Rail Corporation had not been taken into consideration, particularly the adverse effects of the project on agriculture in rural areas. The HKCI demanded that the project be shelved and a public consultation be conducted immediately, together with the release of relevant information regarding the project. The organisation also demanded that any project involving land-use planning should be based on ecological conservation.[36]

4. Concluding Remarks The Catholic Diocese of Hong Kong and the HKCC published their expectations for the new SAR government, respectively, in 2012. Their expectations represent the vision and voices of the Christian community in Hong Kong. The main ideas of their expectations are summarised and explicated in this concluding section, including views that can help change the governance and the policies of the government in the years to come.

4.1 The Catholic Church’s Expectations for the SAR Government The Catholic Diocese of Hong Kong published a paper of expectations in Gongjiao Bao on 15 February 2012, and the Sunday Examiner and Ming Pao on 19 February 2012, identifying three major areas of focus for the

36. HKCI (2009), “Submission on the Guangzhou–Shenzhen–Hong Kong Express Rail Link”, 23 September 2009, www.hkcidata1.org/database/claims/2009/claims090923.html. Accessed 16 September 2012.

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new government: the political system, government policies and internal social tension.[37]

a.

Political system

The paper pointed out that more than two decades after Hong Kong was transferred to China, Hong Kong people still do not enjoy universal suffrage in the election of the Chief Executive or all of the members of the Legislative Council. The Catholic Church held that the government should implement and enforce universal suffrage for the election of the Chief Executive and the entire legislature in 2017. Hong Kong citizens should have the right to nominate the Chief Executive. The Chief Executive, all members of the Legislative Council and District Council members should be elected by citizens on a one-person-one-vote basis.

b.

Government policies

The Catholic Church urged the government to make improvements in the sectors of housing, medical care, education and retirement. The following are their recommendations: 1. The government should formulate effective policies and measures to balance the excesses of market economic activities, and to make a sincere, concerted effort to collaborate with nongovernmental organisations in the domains of education, medical care and social services. 2. The government should re-devise its long-term housing strategies, set the number of residential flats in both the public and private sectors and ensure that land use is in line with the progress of public housing construction. 3. The government should make a comprehensive review of the universal retirement protection scheme and perfect it to benefit the aged, the poor and housewives.

37. The Catholic Diocese of Hong Kong (2012), “Some expectations about the future SAR government envisioned by the Catholic Church in Hong Kong”, Sunday Examiner, 19 February 2012, pp.1, 11–12.

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4. The government should set a poverty line and provide a subsidy to low-income families that fall below the line. Furthermore, to ensure the protection of low-income workers, the government should set the minimum wage level at a rate that can satisfy basic family living needs.

c.

Internal social tension

The paper pointed out that there has been a drastic rise in broken marriages in Hong Kong due to the economic recession, dire unemployment and cultural trends. Cases of domestic violence and child abuse have also increased. The accelerated integration between China and Hong Kong has also led to a number of population problems and social contradictions. Children who were born on the mainland to Hong Kong parents have to wait many years for to be reunited with family. Delivery beds at obstetrics units in hospitals have created conflicts between local expectant mothers and pregnant mainland women. The Catholic Church recommended that the government should invest more resources in education, social services and cultural and educational programmes, and work in collaboration with non-governmental and religious organisations. The government should also formulate a long-term and reasonable population policy. In the concluding remarks of its expectations, the Catholic Church has the following suggestion to the government: “Instead of taking account solely of economic interests, the government should act in a people-oriented spirit for the well-being of every group in society”.

4.2 The Hong Kong Christian Council’s Expectations for the SAR Government The HKCC also published its expectations for the new SAR government in HKCC e-News in June 2012, identifying four major areas for improvement. This paper of expectations was fully reported in the Protestant newspaper Christian Times on 8 June 2012. The four areas are development of a democratic system, building a just society, construction

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of a sustainable society and protection of human rights, safeguarding freedom and diversity, as well as building an inclusive society.[38]

a. The development of a democratic system The government should carry out universal suffrage in the election of Chief Executive and all Legislative Councillors no later than 2020. Functional constituencies in the election of the Legislative Council should be abolished. All District Councillors should also be elected by direct election. The recruitment of members in the new government should be based on capability and integrity. The Principal Officials Accountability System should be strictly implemented. The appointment of members into advisory and statutory bodies should be based on qualifications and capabilities. The recruitment for the chairman or executive officer in the advisory and statutory bodies should also be carried out in an independent and credible manner.

b. The building of a just society The HKCC pointed out that the gap between the rich and the poor has increasingly widened in Hong Kong. The government should make an effort to narrow the gap, and to listen to Hong Kong people’s opinions regarding public policies on taxes, housing, social welfare, medical services, education, labour and retirement. Most importantly, the government should make long-term policies based on consultation and consensus, building partnerships with relevant sectors. The paper provided suggestions in the seven areas above, urging the government to make improvements to its policies. The HKCC stressed in the paper that “the government should uphold the principle of fairness and justice while implementing policies, treating all citizens and sectors equally. It should not give favour to the business

38. HKCC (2012), “Expectations on the Hong Kong special administrative region’s government from Hong Kong Christian Council”, HKCC e-News 78, June 2012, www.hkcc.org.hk/e-news/e-news-78. html. Accessed 16 September 2012.

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sector and property developers at the expense of people’s interest, so that Hong Kong could become a truly just society”.

c.

The construction of a sustainable society

The HKCC has the following suggestions to the government in constructing a sustainable society: The government should make environmental policy in accordance with international standards regarding environmental pollution, waste source reduction, energy efficiency and development of renewable energy. The government should adopt air quality indicators and reduce greenhouse gas emissions to meet the standards set by the World Health Organization. Regarding urban development, the government should make an effort in environmental conservation, protecting the diversity of species and preserving rural areas and the lifestyles of local people.

d.

Protection of human rights diversity, and the building of an inclusive society

The HKCC stated that the government should protect human rights, including freedom of religion, speech, expression, assembly and press. The government should also uphold the values of respecting minorities, accepting new immigrants, providing humanitarian support to refugees and asylum seekers and protecting foreign workers. In doing so, the government safeguards the core values of Hong Kong, making Hong Kong a truly cosmopolitan city. The HKCC also suggested that Hong Kong has a responsibility to assist poor countries through emergency relief and to promote fair trade in economic development. The government should consider the target suggested by the United Nations, contributing 0.7% of its national income to assist in the development of poor countries.

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C H A P TER 8

Can Hong Kong Design a New Growth Engine? A Study of the Absence of Economic Policies of the Donald Tsang Regime [1] Yin-wah CHU Associate Professor, Department of Sociology Hong Kong Baptist University

Alvin Y. SO Chair Professor, Division of Social Sciences Hong Kong University of Science and Technology “…it is important for Hong Kong to be mindful of potential difficulties, make the most of good opportunities and meet the challenges headon. I have said that Hong Kong needs to pay close attention to the following three things. First, Hong Kong needs to have a long-term and scientific development plan. Second, it needs to attach great importance to addressing the underlying problems in its economic and social development. And third, it should work hard to improve people’s wellbeing. I believe it is also important for Hong Kong to pay close attention to the development of education and science and technology so as to sustain the momentum of development. Meanwhile, Hong Kong needs to further develop the service sector, including financial services and tourism in the light of its actual conditions and develop small innovative high-tech enterprises to create more jobs. Hong Kong has sufficient government

1. Yin-wah CHU would like to acknowledge the support rendered by the Research Grants Council (GRF project number: 241308), which helps generate the data that facilitate the comparison of Hong Kong’s policy research capacity with those of South Korea and Taiwan.

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revenues and ample foreign exchange reserves. It should further improve the social safety net, and in particular, take good care of the vulnerable groups so that people in Hong Kong will lead a much better life”. Former Premier Wen Jiabao [2]

1.   Introduction Joseph Y. S. Cheng has referred to the ten years after Hong Kong’s return to China as “a lost decade” with little progress in economic development, democratisation, and community empowerment.[3] In the aftermath of the 1997–98 Asian Financial Crisis, C. H. Tung, the first Chief Executive, failed to develop an effective strategy for economic growth; thereby contributed to a widening gap between the rich and the poor and growing unrest in Hong Kong society. A gigantic protest rally took place on 1 July 2003, leading to a crisis of legitimacy of the Hong Kong government. In the aftermath of the 1 July 2003 protest, Donald Tsang was selected to complete the remaining two years of the term of C. H. Tung who suddenly resigned in 2005. Donald Tsang won a full five-year term as the Chief Executive in 2007, so he has been the Chief Executive of the Hong Kong Government from 2005 to 2012. A civil servant since 1967, most of Donald Tsang’s career has been concerned with economic and financial affairs. In 1995, Tsang became the first Chinese to be appointed by the British colonial government to the post of Financial Secretary. Tsang was subsequently promoted to Chief Secretary for Administration, the number two government post, in May 2001. When Tsang became the Chief Executive in 2005, there were high hopes that he could be a better person than Tung to pull Hong Kong out of a decade of lost opportunities in the aftermath of the Asian financial crisis. But could Tsang develop an effective developmental strategy for Hong Kong’s economy?

2. Ministry of Foreign Affairs, PRC, “Premier Wen Jiabao Meets the Press, 14 March 2011”. www. fmprc.gov.cn/eng/zxxx/t807599.htm, accessed 12 April 2011. 3. Joseph Y. S. Cheng (2008). The Hong Kong Special Administration Region in its First Decade. Hong Kong: City University of Hong Kong Press.

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On 14 March 2011, former Premier Wen Jiabao expressed his concern over the long-term economic and social development of Hong Kong, urging the government of the Special Administrative Region (SAR) to take effective measures not only to improve the people’s livelihood, but also to make a “scientific development plan” so as to “sustain Hong Kong’s momentum of development”. According to close observers of Hong Kong, this is the fourth time that Donald Tsang, since he assumed the position of the territory’s Chief Executive in 2005, received similar comments and recommendations from the former Premier Wen.[4] Such comments are not identical to, but echo in an intriguing way, criticisms made by the former Premier Zhu Rongji when C. H. Tung served as Hong Kong’s Chief Executive. On 4 September 2001, Premier Zhu expressed his impatience over Hong Kong’s slow economic recovery in the aftermath of the Asian Financial Crises and reprimanded the Tung regime for “deliberating without decision, [and] deciding without implementation”.[5] Whether or not one agrees with the two Premiers’ diagnoses of Hong Kong, it is undeniable that the territory, which before 1997 a source of pride as the “goose that laid golden eggs” for China, has found its economic competitiveness dwindling over the last 14 years. Importantly, while Hong Kong’s gross domestic product (GDP) has increased by 18.8% between 1997 and 2009 it lags far behind China’s stunning growth of 350.4% during the same period.[6] Similarly, at the same time that Hong Kong’s ranking in the “global competitiveness index” declined drastically from second to eleventh place between 1997 and 2010/2011, China’s ranking improved moderately from 29 to 27 during the same time. Hong

4. Mingpao Editorial, “Wen Jiabao dui Xianggang Fachan Qipang; Jiwang Xiaren Teshou Renjenkangdai” (“Wen Jiaobao’s Visions on Hong Kong Development; Hoping for Serious Consideration by the Next Chief Executive”), Mingpao Daily News, 15 March 2011, A02; Hong Kong Economic Journal, “Caizheng Chongyu xia xu Gaishan Minsheng; Wencong Xungang Anpi ‘Kangshou Xintai’” (“Imperative to Enhance People’s Livelihood under the Circumstance of Financial Opulence; Premier Wen’s Comments as Hidden Criticisms of ‘Caretaker Mentality’”), Hong Kong Economic Journal, 15 March 2011, p. 15. 5. Singtao Daily News, “Zhuzhong pi Gang ‘Yi er Bujue’” (“Premier Zhu Criticised Hong Kong for ‘Deliberating without Decision’”), Singtao Daily News, 5 September 2001, A01. 6. Census and Statistics Department, “Gross Domestic Product: 1961–2010”, www.censtatd.gov.hk/ showtableexce12.jsp?TbaleID=030&charsetID=2, accessed 9 May 2011; Chinability.com, “GDP growth in China 1952 – 2009”, www.chinability.com/GDP.htm, accessed 9 May 2011.

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Kong’s innovation capability has in particular been most disappointing: whereas it ranks 29 globally, China, Taiwan, and Singapore rank 26, 17, and 9, respectively.[7] It is not the purpose of this chapter to provide a comprehensive explanation for the apparent decline in economic competitiveness of Hong Kong since 1997. Rather, the following will focus on policies of economic development pursued by the SAR government under Donald Tsang, identifying and evaluating the policies so adopted. Having done this, the essay will move on to identify the reasons underlying the feebleness of such policies and the ineffectiveness of their implementation.

2. Policies of Economic Development — Donald Tsang Regime The SAR government under Donald Tsang has from the beginning made the territory’s economic performance a focal concern. The Tsang regime understood very well that Hong Kong has long exhausted its price competitiveness. However, instead of going into high technology production in the early 1980s like the other three “little dragons”, manufacturing industries in Hong Kong instead relocated to China, and the territory moved progressively into trade and finance. Although the trade and finance sectors had created many high end jobs, they were irrelevant to people with little formal education. Despite the ups and downs associated with the two financial crises in 1997 and in 2008, Hong Kong still managed to keep up the appearance of affluence. However, more and more people are toiling in casual jobs, part-time jobs, and jobs without a clear career ladder, [8] which manifests at the macro level in the widening income gap and the growth of political unrest in the territory in the first decade of the 21st century. Thus there is an urgent need to develop and promote new engines of economic growth.

7. World Economic Forum, The Global Competitiveness Report 2010-2011, http://gcr.weforum.org/ gcr2010/, accessed 8 April 2011. 8. See Stephen W. K. Chiu, Alvin Y. So, and Yeuk-mui Tam (2008). “Flexible Employment in Hong Kong: Trends and Patterns in Comparative Perspective”, Asian Survey, Vol. 48, No. 4, pp. 673–702; Hung Wong and Kim-ming Lee (2001). Predicament, Exclusion, and the Way Out: A qualitative study of Hong Kong’s Marginal Workers. Hong Kong: Oxfam.

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However, Donald Tsang’s regime has adhered to the vision of a regulatory state, and only gradually has it perceived the urge to help promote economic development. Bit by bit one detects some proactive moves, yet it remains the case that the regime has expended more strenuous effort and taken more concrete steps to support the existing financial services sector, the sector in which Hong Kong has long been considered to possess a competitive edge, rather than in promoting new strategic sectors. In the first Policy Address prepared by Donald Tsang, he made it clear that Hong Kong should leverage the Mainland, encourage entrepreneurship and fair competition under the principle of “Big Market, Small Government”, and consolidate the territory’s position as a key international financial, trading, transportation and information hub of China.[9] The same document examined quite extensively the strengthening of regulation and expansion of Renminbi (RMB) business as measures to enhance the financial sector; yet it noted in only one paragraph that the Commission on Strategic Development would explore measures to assist the creative industries.[10] Together with the document’s lengthy discussion of mechanisms to facilitate economic cooperation with the Mainland (the Closer Economic Partnership Arrangement [CEPA], Guangdong, and PanPearl River Delta Development [pan-PRD]), educational reforms (as a mechanism for “optimising human resources”), and various infrastructural projects, it suggests clearly that the Tsang regime feels more comfortable with playing an auxiliary role to the market in the matter of economic development (see Table 8.1). September 2006 is considered by some observers to mark the turning point for the Tsang regime.[11] In that month, the first ever Economic Summit was held, involving top business leaders and government officials to discuss challenges and opportunities arising from China’s 11th Five-

9. Chief Executive, “The 2005–06 Policy Address: Strong Governance for the People”, paragraph 72, www.policyaddress.gov.hk/05-06/eng/pdf/speech.pdf, accessed 2 May 2011. 10. Chief Executive, “The 2005-06 Policy Address”, p. 98. 11. Anthony B. L. Cheung (2007). “Policy Capacity in Post-1997 Hong Kong: Constrained Institutions Facing a Crowding and Differentiated Polity”, The Asia Pacific Journal of Public Administration, Vol. 29, No. 1, p. 64.

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• Guangdong (GD): investment, education, infrastructure, environment, etc.

• Shenzhen

• Support preparation for the Nat’l 12th FY Plan

• Pan-PRD: business services

• Work with Shenzhen, GD, pan-PRD

• Action Agenda on the National 11th FY Plan

• HK service providers to operate in Mainland

• Exchanges with Taiwan

• HK-Zhuhai-Macao Bridge; Lok Ma Chau Loop

• Taiwan

• Guangdong: develop 6 industries by working with GD on all fronts at national strategic level; build quality living circle & infrastructure; Qianhai in Shenzhen

Regional cooperation

• Professional service: CEPA

• Wine trade

Regional integration

• Trading and logistics: Outline of the Plan for the Reform and Dev. of the PRD; airport handling capacity

• Tourism: (a) Mainland visitors, (b) cruise term.

• Global financial center: (a) asset mgt, (b) multi-level int’l service for RMB, (c) cooperate with Mainland FI; (d) enhance regulation

Pillar industries

2009–10

• Tourism: coordination between HK Economic & Trade Offices, TDC, Invest HK, and HK Tourism Board

• Global financial center: (a) HKMA & SFC (enhance regulatory regime, investor protection), (b) develop securities market

Reinforce main pillars

2008–09

• Restructure HK firms in PRD: SME funding scheme

• Tourism: international convention & exhibition

• International financial hub: (a) Qualified Domestic Institutional Investors Scheme, (b) RMB business, (c) cooperate with Mainland financial market, (d) Islamic bond, (e) international arbitration service

Reinforce main pillars

2007-–08

Regional integration

CEPA/ Regional cooperation

• Financial center: (a) enable qualified foreign firms to list in HK by amending rules, (b) RMB business, (c) market for commodity futures, insurance & reinsurance for Mainland

• Trade and logistics: air & river cargo

Main pillars

• International financial center: (a) New Basel Capital Accord, (b) Securities and Futures (Amendment) Bill, (c) bond market, (d) fund management, (e) asset management; (f) expand RMB business

2006– 07

Our position

2005–06

Table 8.1 Economic and Auxiliary Policies as Presented in Donald Tsang’s Policy Addresses 2005/06 – 2010/11

• Taiwan: various committees set up

• Shenzhen: Qianhai (approved by State Council in August 2010)

Regional cooperation

• Professional service: CEPA

• Logistics: port facility in Tsing Yi & air cargo terminal

• Tourism: CEDB to review regulation

• Financial services: global capital formation, asset mgt, offshore RMB business (cooperate w/ Mainland & emerging markets), investor protection

Pillar industries

2010–11

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• Information Technology: (a) convergence “Communications Authority”; (b) radio spectrum management

• Government offices, railway, airport, HKZhuhai-Macao (HZM) Bridge, Integrated cultural district in West Kowloon (public consultation), Commercialisation of creative ideas (Commission on Strategic Development), film industry (to set up a Film Development Board), Creative arts center at Shek Kip Mei

• Expand int’l school

• Quality migrant admission scheme

• Wage protection movement

• Introduce “Minimum wage bill” in 2008/9

• Introduce “competition bill” in 2008/9

• Change “Quality migrant admission sch”.

• Expand int’l school

Auxiliary policies

• Creative Industries (CEDB to set up a “Creative industry office” with realigned resources from the TV & Entertainment Licensing Authority, the Innovation & Tech. Commission, the Office of the Government Chief Information Officer, and the Trade and Industry Dept)

• Development of Scientific Research (Internship program under ITF)

Economic & trade devt

• CCI: CEPA, WKCD

• Innovation & tech.: HK$200 m. R&D Cash Rebate Scheme for enterprises

• Environmental industries: HK$93 m. to launch Cleaner Production Partnership Program with GD

• Testing & certification: est. HK Council for Testing & Certification, align work of the HK Accreditation Service under the Innovation & Tech. Commission (training, promotion)

• Medical services: (a) private hospitals, (b) train med professionals, (c) Chinese medicine

• Education services: (a) 4 greenfield sites to 4 operators of int’l school, (b) internationalisation, (c) selffinancing

Six industries

• WKCD: review the 3 conceptual plans, HK$3 billion to Arts and Sports Development Fund, display visual arts pieces

• Support SMEs: credit, competition bill

Auxiliary policies

• Six industries: gradually implementing measures recommended by the Task Force

• Ten major infrastructure projects: making progress

10 projects; 6 industries

Sources: Chief Executive, “The 2005 Policy Address”; “The 2005–06 Policy Address”; “The 2006 –07 Policy Address”; “The 2007–08 Policy Address”; “The 2008-09 Policy Address: Embracing New Challenges”, www.policyaddress.gov.hk/08-09/eng/docs/policy.pdf, accessed 2 May 2011; “The 2009-10 Policy Address”; “The 2010-11 Policy Address: Sharing Prosperity for a Caring Society”, www.policyaddress.gov.hk/10-11/eng/pdf/policy.pdf, accessed 2 May 2011.

• Change “Quality migrant admission sch”.

• Fair competition: public consultation

Auxiliary policies

• Optimise human resources: education reform at various levels

Auxiliary policies

• Creative capital: accelerate CCI development in the FS & next 5 years CEDB to draw up overall development plan

• 3 new urban development: incl. WKCD & Kai Tak Development Plan

• 4 cross-boundary infrastructure: (Guangzhou-Shenzhen & HK express rail link, HZM Bridge, HK-Shenzhen airport cooperation, (d) Development of Lok Ma Chua Loop

• 3 local transport infrastructures

10 major projects

Auxiliary Policies

• West Kowloon Cultural District (WKCD): reassess plan

• Cultural and Creative Industries (CCI): (a) film HK Film industry Development Council; (b) cultural atmosphere partner performers with venue operators

• Technology application: (a) Innovation & Technology Fund (ITF), (b) Integrated Circuit Design & Development Support Center, (c) Digital Media Center & Wireless Development Center, (d) Design Center ($100 m)

Independent innovation

Infrastructure

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Year Plan. After the Summit, Tsang felt compelled to account for the public’s concern with the government’s seeming departure from “positive non-interventionism”. In his words, “The description of Hong Kong’s style of capitalism, which the HKSAR government preferred to use in recent years, was ‘Big Market, Small Government’. This means that we respond to the needs of the market and do our best to support and promote economic development within the limits of a small government”. [12]

Significant as it might appear, the Summit has not been the conduit of groundbreaking ideas, whether in the sectors identified or in mechanisms of support. The Summit has been organised around four focus groups: (1) trade and business, (2) financial services, (3) maritime, logistics and infrastructure, and (4) professional services, information technology, and tourism, which correspond roughly to what were considered the four core industries under the C. H. Tung regime.[13] The Action Agenda of the Economic Summit, submitted in January 2007, has recommended no more than the streamlining of government institutions supporting those sectors, collection of pertinent information, and enhanced liaison with Mainland authorities.[14] Examination of Policy Addresses delivered after September 2006 further supports the idea that one should not exaggerate the significance of the Summit. To be sure, the 2006–07 Policy Address, in addition to financial services, paid more attention to information technology, technology application, and the cultural and creative industries (see Table 8.1).[15] Nonetheless, the initiative for the information technology sector was to set up a new “Communications Authority” to tackle the convergence between

12. Government Information Service, Economic Summit on China’s 11th Five-Year Plan and the Development of Hong Kong, 2006, http://www.info.gov.hk/info/econ_summit/eng/index.html, accessed 13 May 2011, emphasis added. 13. Government Information Service, Economic Summit. 14. Government Information Service, Report on Economic Summit on China’s 11th Five-Year Plan and the Development of Hong Kong, 2007, www.info.gov.hk/info/econ_summit/eng/pdf/report.pdf, accessed 13 May 2011. 15. These three were placed under the category of “independent innovation”, which echoed the idea of “autonomous innovation” emphasised in the National 11th Five-Year Plan.

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telephony, broadcasting and internet — a move that facilitates the delivery of information service rather than the development of a potential economic sector. Similarly, practically all initiatives under technology application or cultural and creative industries were continuations of those launched in C. H. Tung’s day.[16] In turn, although the 2007–08 Policy Address provided an extensive discussion of the ten infrastructural projects (local and trans-border) and the financial services sector, it contained only one paragraph on the Action Agenda (see Table 8.1). In other words, despite the novelty of the Summit, the Tsang regime’s economic philosophy has not undergone fundamental change and the Summit has not set the stage for launching strategic development plans. The next major change occurred with the onset of the 2008 financial tsunami. To address the matter, the government formed a Task Force on Economic Challenges, one duty of which was to search for new growth sectors. After deliberating for some months, in mid-June 2009 the Task Force came up with a number of recommendations that were incorporated into the 2009–10 Policy Address.[17] The Task Force explored six economic sectors; (1) testing and certification, (2) medical services, (3) innovation and technology, (4) cultural and creative industries, (5) environmental industry, and (6) educational services. Moreover, the government pledged to provide concrete support. They included significantly the provision of land for the development of two private tertiary educational institutions and four private hospitals, increase in opportunities for artists to perform and display their works, government procurement of green products, the formation of a Council of Testing and Certification, and the provision of a HK$200 million cash rebate for private sector research and development.

16. Chief Executive, “The 2005 Policy Address: Working Together for Economic Development and Social Harmony”, www.policyaddress.gov.hk/2005/eng/index.htm, accessed 8 May 2011. 17. Task Force on Economic Challenges, “Developing New Economic Pillars”, Paper for discussion on 3 April 2009, www.fso.gov.hk/tfec/eng/doc/New%20Economic%20Pillars%20_TFEC-D03_%20 Eng.pdf, accessed 2 May 2011; Task Force on Economic Challenges, “Summary of the Focus Group Discussions on the Six Economic Areas, 22 June 2009”, www.fso.gov.hk/tfec/eng/doc/ Summary%20focus%20groups%20_TFEC-INFO-12_%20_Eng_.pdf, accessed 13 May 2011; Government Information Service, “Transcript of Remarks by CE at Media Session after Meeting of Task Force on Economic Challenges (2009)”, www.info.gov.hk/gia/general/200906/22/P200906220250. htm, accessed 13 May 2011; Chief Executive, “The 2009–10 Policy Address: Breaking New Ground Together”, www.policyaddress.gov.hk/09-10/eng/docs/policy.pdf, accessed 2 May 2011.

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The formation of the Task Force has indeed signalled new departures on the part of the Tsang regime. Although most of the six sectors have been explored previously either as emerging economic sectors or as measures for social development, it is still a novel step for the government to name them as “new economic pillars”. The provision of land and cash rebate is also rather unprecedented for the present government. Once again, however, one should not exaggerate the extent of transformation. The government has earmarked no more than HK$93 million and HK$200 million, respectively, on a one-off basis, for the environmental industry and the innovation and technology sector (see Table 8.1). As for the medical services and education services sectors, one is not sure if the government means to give more choices to local patients/ students or to develop new economic propellers as such. Indeed, given the escalating disputes over the rights of pregnant women from the Mainland to hospital places in Hong Kong, one also doubts if these “new growth sectors” have been accompanied by viable business models at all. To further make sense of the Tsang regime’s approach to promoting economic development, the following discussion will focus on (1) technology and innovation, (2) the cultural and creative industries, and (3) the financial services sector. In particular, we will examine the financial resources and the institutional resources that are put forth for the promotion of these sectors.

2.1 Technology and Innovation In the first place, it is obvious that the Tsang regime has shown much caution in channelling resources into the promotion of technology and innovation.[18] Most of the financial and institutional resources had already been set aside by the former Chief Executive, C. H. Tung. For example, the Commission on Innovation and Technology was formed in 1999, which subsequently put into place the Innovation and Technology

18. The Tsang regime has discussed the development of high technology industries within the Commission on Strategic Development in June 2007 and within the Task Force on Economic Challenges in April 2009.

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Fund (HK$5billion), Applied Research Fund, Science Park, Applied Science and Technology Research Institute, and the Cyberport.[19] With the inauguration of the Tsang regime in 2005, the strategy changed from the promotion of high-tech industries to the encouragement of technologies that serve industrial needs. Five R&D centres focusing on automotive parts, logistics, textiles, nanotechnology, and ICT have been set up. With the exception of the last two, the tasks of these centres are ostensibly similar to those of the Productivity Council. Instead of aiming at the founding of new technology industries, they target the industrial application of more advanced technology to existing industries that might have already been relocated to mainland China. Not only is this approach “market-following”, but the scale appears to be too small to attain major impacts.[20] Indeed, save for the modest HK$200 million cash rebates set aside in 2009 to encourage private sector R&D, the government has not made further financial commitments (see Table 8.1).[21] Institutionally, the de-emphasis on innovation and technology may be perceived from the reorganisation of the Commerce, Industry and Technology Bureau (CITB) into the Commerce and Economic Development Bureau (CEDB) in 2007 when Tsang’s new term began.[22] In a way, one detects regression rather than progress in innovation and technology policies under Tsang’s leadership.

19. Task Force on Economic Challenges, “Developing New Economic”; Yin-wah Chu, “Networking for Domination”, in Heidi Dahles and Otto D. van den Muijzenberg (eds.), Capital and Knowledge in Asia. London: RoutledgeCurzon, pp. 23 – 39. 20. Commission on Strategic Development, “Development of High Technology Industries in Hong Kong”, Paper for meeting on 14 June 2007 of the Executive Committee, www.cpu.gov.hk/ english/documents/csd/csd_ec_6_2007.pdf, accessed 15 May 2011; Commission on Strategic Development, “Summary of the views expressed at the Tenth Meeting of the Executive Committee of the Commission on Strategic Development held on 14 June 2007”, www.cpu.gov.hk/english/ documents/csd/csd_ec_summary_10.pdf, accessed 15 May 2011; see Robert Wade, Governing the Market (Princeton: Princeton University Press, 1990) for a discussion of the idea of market following. 21. HK$2 billion were said to be earmarked for the five centers to operate for five years. However, the money was set aside from the ITF. 22. See also Hong Kong Economic Journal, “Wu Daxue Yuanchang Lianshu Chu Si Bumen Tuidong Keji” (“Joint Declarations by Deans of Five Universities Urging the Establishment of Government Department to Push Technological Development”), Hong Kong Economic Journal, 21 February 2011, p. 13; Kam-fai Wong, “Zhuanxing Keji Jingsai: Haiyao Tuibu Duosao” (“The Competition in Technological Innovation: how much more regression?”) Hong Kong Economic Daily, 29 January 2011, A19.

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2.2  Cultural and Creative Industries The cultural and creative industries fared similarly.[23] It was in 2002 that the Tung regime commissioned the first study of Hong Kong’s creative industries. A number of financial and institutional initiatives were made around that period to support the creative industries, especially design, multimedia entertainment, and film. They included the Film Development Fund (HK$300 million),[24] the Film Services Advisory Committee, Digital Media Center, iResource Center, Hong Kong Design Center, and the DesignSmart Initiative (HK$250 million).[25] Although the Tsang regime has shown greater concern with the cultural and creative industries by ordering the Financial Secretariat and the CEDB in 2007 to draw up an overall development plan, the most immediate outcome was the formation of a “Creative Industry Office” to realign resources from the TV and Entertainment Licensing Authority, the Innovation and Technology Commission, the Office of the Government Chief Information Officer, and the Trade and Industry Department.[26] For financial resources, despite requests by some members of the Commission on Strategic Development to set up matching funds for the commercialisation of creative ideas, they were not entertained. Finally,

23. This paragraph relies mainly on the following reports: Commission on Strategic Development, “Promoting the Development of Creative Industries”, Paper for meeting on 6 February 2006, www. cpu.gov.hk/english/documents/csd/csd_edc_2_2006.pdf, accessed 13 May 2011; Commission on Strategic Development, “Summary of the views expressed in the Second Meeting of the Committee on Economic Development and Economic Cooperation with the Mainland of the Commission on Strategic Development held on 6 February 2006”, www.cpu.gov.hk/english/documents/csd/csd_ edc_summary_2.pdf, accessed 14 May 2011; Task Force on Economic Challenges, “Developing New Economic”; Task Force on Economic Challenges, “Recommendations from the Task Force on Economic Challenges for Promoting the Development of the Six Economic Areas”, Paper for meeting on 22 June 2009, www.fso.gov.hk/tfec/eng/doc/TFEC%20-%20final%20Recommendations%20_ TFEC-INFO-13_%20_Eng_.pdf, accessed 13 May 2011; Task Force on Economic Challenges, “Summary”. 24. The Film Development Fund was first proposed in C. H. Tung’s 1998 Policy Address with an allocation of HK$100 million and an additional fund of HK$300 million were injected in July 2007 under Donald Tsang’s initiative. 25. Chief Executive, “The 2005 Policy Address”; Commission on Strategic Development, “Promoting”. 26. Chief Executive, “The 2007–08 Policy Address: A New Direction for Hong Kong”, www. policyaddress.gov.hk/07-08/eng/docs/policy.pdf, accessed May 2, 2011.

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apart from the proposal to nurture a local audience and to train local talents with the use of the Film Development Fund, the most concrete recommendation made by the Task Force on Economic Challenges was to re-develop under-utilised industrial buildings for the industry, which incidentally has driven up the price of industrial buildings and is considered by practitioners in the creative industries to be disastrous.

2.3  Financial Services Turning to the financial services sector, it is notable that the Tsang regime has attached great importance to the sector from the outset. Apart from calling the Commission of Strategic Development to examine the sector’s further development in relation to the Mainland government’s 11th FiveYear Plan, new initiatives were presented nearly every year in the Policy Address.[27] It is true that no financial resource has been committed, yet the government has closely monitored the regulatory regime, making sure among other things that qualified foreign enterprises could list their stocks and eligible investors from the Mainland can take part in the market. Above all, the government made much effort to explore the potential of commodities futures market, Islamic bonds, financial services for other emerging markets such as India and Russia, as well as multiple-level cooperation with mainland authorities on RMB business (see Table 8.1). Four points emerge from the above discussion. First, as some scholars have observed, the SAR government has “steadily embraced a more active and interventionist economic role”.[28] The willingness to lend support to the six industries examined by the Task Force on Economic Challenges is most indicative.

27. Commission on Strategic Development, “Further Development of Hong Kong’s Financial Services”, Paper for meeting on 31 May 2007 of the Committee on Economic Development and Economic Cooperation with the Mainland, http://www.cpu.gov.hk/english/documents/csd/csd_edc_2_2007. pdf, accessed 15 May 2011; Commission on Strategic Development, “Summary of Views Expressed at the Ninth Meeting of the Committee on Economic Development and Economic Cooperation with the Mainland of the Commission on Strategic Development held on 31 May 2007”, http://www.cpu. gov.hk/english/documents/csd/csd_edc_summary_9.pdf, accessed 15 May 2011. 28. Anthony B. L. Cheung, “In Search of Trust and Legitimacy: The Political Trajectory of Hong Kong as part of China”, International Public Management Review, Vol. 11, No. 2 (2010), p. 48.

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Second, however, the transformation should not be over-stated. Most of the “new growth sectors” have been identified and given support during Tung’s regime. Resources committed for the promotion of these industrial sectors were limited by international standards, and the government was careful to insist on the market taking the lead. Third, and in part because of the previous point, it is clear that the Tsang regime has been uneven in implementing its development policies. The financial services sector was prioritised and the government hardly hesitated in the provision of institutional resources. Support for the other industrial sectors, however, marches much more slowly. In part because of this, the economic structure in Hong Kong has been slow to change (See Table 8.2). Fourth, Mainland China has occupied an increasingly important position in the government’s development policies. Economic sectors — old and new — have all looked toward the Mainland as a potential market, and the Tsang regime also plays an active part in liaising with various levels of Mainland authorities to promote financial services, to cooperate in the development of high technology industries, and to attract talent by putting into place an appropriate immigration policy. In short, the Tsang regime has sought to ride on the China tide as a means to manage the torrent of globalisation. Yet, the extent to which it can identify new sources of economic dynamism and retain its global competitiveness is an issue that remains to be observed.

3.  Policy Inertia — Institutional Origins What explains the hesitant and uneven developmental supports rendered by the Tsang regime towards the new engines of economic growth? In the following sections, we will identify the economic beliefs and institutional setup of the bureaucratic polity as well as the social-political constraints confronting the SAR government as the key reasons for the failure to develop new growth engines.[29]

29. Scott refers to the issue as “a systemic failure attributable to legitimacy and governance structure”. See Ian Scott (2007), “Legitimacy, Governance and Public Policy in Post-Handover Hong Kong”, The Asia Pacific Journal of Public Administration, Vol. 29, No. 1, p. 32.

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3.3

—

—

4.9

—

—

—

—

—

—

12.1

24.4

—

—

—

—

—

—

11.0

27.1

3.3

15.7

—

—

—

—

—

—

12.2

24.3

5.1

5.4

—

—

—

—

—

—

11.6

25.6

3.4

19.3

—

—

—

—

—

—

12.5

24.0

5.5

5.5

0.3

0.3

0.6

1.0

1.4

4.0

12.5

25.7

2.8

16.0

0.9

0.4

0.7

1.6

2.0

5.4

12.9

23.4

5.6

5.9

0.3

0.3

0.7

1.1

1.6

4.1

13.1

24.1

3.3

15.2

0.9

0.4

0.8

1.8

2.1

5.4

13.1

22.6

5.5

6.1

Source: Census and Statistics Department, “The Four Key Industries and the Six Industries in the Hong Kong Economy (2011)”, www.censtatd.gov.hk/hong_kong_statistics/ four_key_industries/index.jsp, accessed 1 July 2011

Industries

Environment

certification

Testing and

technology

Innovation and

—

—

services

—

Education

—

11.1

28.6

Medical services

industries

creative

Cultural and

Six Emerging Sectors

services

other producer

Professional and

logistics

Trading and

Tourism

services

Financial

5.3

(%)

12.7

Total Employ

in GDP (%)

(%)

in GDP (%)

(%)

in GDP (%)

(%)

in GDP (%)

(%)

in GDP (%)

Four Key Industries

Percentage

Value Added

Total Employ

Value Added

Total Employ

Value Added

Total Employ

Value Added

Total Employ

Value Added

2009 Percentage

Percentage

2008 Percentage

Percentage

2007 Percentage

Percentage

2006 Percentage

Percentage

Percentage

2005

Table 8.2 Four Key Industries and Six Emerging Sectors

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3.1  Bureaucratic Polity — Beliefs in Positive Non-intervention Despite the return of Hong Kong to the sovereign rule of China for more than a decade, the beliefs that underlie the SAR government’s economic policies have still been coloured by variants of the idea of, “positive non-interventionism”. According to Sir Hadden-Cave, the former Financial Secretary who coined the term in the 1980s, although it is the government’s responsibility to intervene when industries with social obligations run into trouble, it should as a matter of principle not try to affect the allocation of resources or temper with market forces.[30] For some observers, the notion was ideological, as the colonial government had in fact facilitated economic growth through its investments in public housing, education, health care, and the control of food prices.[31] For other observers, the low-intervention strategy was not an ideology but “the product of a particular political configuration and of a peculiar state-society relationship at a particular time”.[32] It provided an excuse for the colonial government when it needed to evade its social-economic obligations. Nevertheless, if we confine the idea to developmental support rendered to particular industrial sectors (rather than development of the whole economy or social development as such), non-interventionism had been adopted and, perhaps as Leo Goodstadt suggested, it was a conscious attempt on the part of the colonial government to avoid succumbing to requests made by British merchants and therefore maintain its legitimacy to rule.[33] Whatever is the reason, positive non-interventionism has become a deep-seated belief shared by Donald Tsang and other senior government officials, who make use of the notion to defend their arms-length approach in the promotion of economic sectors. Regina Ip, for instance, is reported to have made a most eloquent argument in the mid-1990s against the

30. Ngok Ma (2007). Political Development in Hong Kong: State, Political Society, and Civil Society. Hong Kong: Hong Kong University Press. 31. Manuel Castells (1996). The Rise of the Network Society. Cambridge, Mass.: Blackwell. 32. See Ngok Ma, Political Development. 33. Leo F. Goodstadt (2005). Uneasy Partners: The Conflict between Public Interest and Private Profit in Hong Kong. Hong Kong: Hong Kong University Press.

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provision of support to manufacturing industries and the need to maintain a small government.[34] As the last Financial Secretary of the colonial government, Donald Tsang is doubtless well-versed in the idea. He once remarked that “individual governments taking action would not … only [be] ineffective, it could in fact incur new risks in the markets, causing disruption elsewhere and reverberate back to you, hitting you at the end of the day”.[35]

As pointed out in the previous section, although the Economic Summit held in September 2006 and the appointment of the Task Force on Economic Challenges in 2009 seem to signal important changes in the economic approach of the Tsang regime, the actual extent of transformation has been limited. The four traditional pillars and six new economic sectors have either been identified for special support or examined as elements of social development in C. H. Tung’s day. Instead of committing further resource support or taking the lead, the Tsang regime has continued to rely on private sector initiatives. Furthermore, while more specific and forthright support has been rendered to the finance sector, support to the cultural and technology industries tends to be general and hesitant. Limitation and hesitation in the government’s commitment can be explained best by Donald Tsang himself in the September 2006 press release: “… the government should not intervene into any sector of the market, which the private sector can sustain on its own…. In the face of rapid changes in the world and on the Mainland, we must take a proactive but at the same time pro-market approach and see how we could provide a platform and foster an environment that would best support economic development.” [36]

34. Shu-hung Tang, “Wenzhong Zhonggu yu Tequ Zhengfu de Jingji Jaosi” (“Premier Wen’s Advice and the Economic Role of the SAR Government”,) Hong Kong Economic Journal, 23 March 2011, p. 15. 35. Donald Tsang, “An interview with Hong Kong’s Chief Executive, Donald Tsang Yam-Kuen”, Hong Kong Journal, January 2009, No. 13. 36. Chief Executive, “The 2006–07 Policy Address: Proactive, Pragmatic, Always People First”, www. policyaddress.gov.hk/06-07/eng/pdf/speech.pdf, accessed 2 May 2011, emphasis added; see also Chief Executive, “Big Market, Small Government”, press release on 18 September 2006, www.ceo. gov.hk/eng/press/oped.htm, accessed 1 July 2011; Chief Executive, “The 2007–08 Policy Address”.

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It seems Donald Tsang really believes that the market is the best means to promote economic development. When Tsang was asked about the global economic slowdown in 2008 during an interview, he commented, “this is a phase we [Hong Kong] have to go through, Darwinism will reign, and the stronger ones will survive and the weaker ones will be shaken out”.[37]

3.2  Bureaucratic Polity — Research Deficit Apart from economic beliefs, an equally important constraint on the SAR government’s capacity for economic policy-making is the institutional set-up of the bureaucratic polity. Most fundamentally, as noted by a number of observers, senior civil servants in Hong Kong have historically been recruited as generalists. They would undergo initial training and be transferred from one bureau to another. The general training allowed them to operate efficiently in matters of day-to-day operation, but did not prepare them adequately for policy-making.[38] At the same time, the bureaucratic polity has been characterised by the palpable lack of research units. Within the government, the following institutions are intended to conduct research and make policy recommendations. •

The Central Policy Unit advises the Chief Executive, the three Secretaries, and in recent years oversees and commissions various policy research studies.

•

The Economic Analysis and Business Facilitation Unit and the Monetary Authority advise the Financial Secretary.

37. Dondal Tsang, “An Interview”. 38. See Eliza W. Y. Lee (1999). “Governing Post-Colonial Hong Kong”, Asian Survey, Vol. 39, No. 6, pp. 940–959. Furthermore, it is of interest to note that while Scott thinks that the colonial state had a good policy-making system in place, Goodstadt comments that colonial officials transferred from other parts of the British Empire found policy-making in Hong Kong a casual, haphazard, and unstructured process, complaining that there can never be an adequate factual basis for sophisticated planning. See Ian Scott, “Legitimacy”; Leo F. Goodstadt (2009). “A Fragile Prosperity: Government Policy and the Management of Hong Kong’s Economic and Social Development”, Hong Kong Institute for Monetary Research, Working Paper No. 01/2009, p. 9.

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•

217

Policy Commissions, independent of the bureaucracy, have appointed since colonial days to bring policy innovation to Hong Kong government by absorbing “opinion from the public and professionals”.[39] For instance, the Commission on Strategic Development, formed in 1998, has advised the Hong Kong government on various economic, political and social issues. The Economic Summit and the Task Force on Economic Challenges, in turn, have been appointed on ad hoc basis.

Since the Economic Analysis and Business Facilitation Unit as well as the Hong Kong Monetary Authority have focused either on short-term economic trends or on specific aspects of the economy, they can provide little support in the making of long-term or macro-economic planning.[40] The Economic Summit, the Task Force on Economic Challenges and the Commission on Strategic Development have indeed been charged with the duty of examining long-term economic issues. However, even though these ad hoc organisations have recruited the territory’s foremost academics, professionals and businessmen, their appointees are known to be notoriously busy. The appointees have to fall back on the relevant secretariats (e.g., the Central Policy Unit or other policy bureaus) for background research and, although the appointees might provide general advice, it would be impractical to expect them to provide detailed and considered policies. The inadequacy of the establishment for policy research in Hong Kong becomes clear when one makes comparisons with governments that undertake regular development planning. In Hong Kong, the Central Policy Unit (CPU) has no more than 17 full-time researchers who have to deal with a variety of social, political, and economic issues.[41] By contrast, the “Department of Industrial Technology”, which is one of the 16 staff units of Taiwan’s Ministry of Economic Affairs (MoEA), is in charge of the Institute for Information Industries (III) and the Industrial Technology

39. Ngok Ma, Political Development. 40. Shu-hung Tang, “Wenzhong”. 41. Central Policy Unit, “About Us”, www.cpu.gov.hk/english/about_senior_staff.htm, accessed 25 June 2011.

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Research Institute (ITRI), among others.[42] While the III has a total of about 1,500 research staff, ITRI boasts 6,000 full-time employees that either undertake technology, economic, or other professional research related to various industrial technologies. Apart from seeking technological breakthroughs, these research institutes also generate industrial/economic intelligence and provide support for the Ministry’s policy formulation. The Council for Economic Planning and Development (CEPD), which was in charge of economic development policy up to the 1980s, but has focused on matters of land development in recent years, also has a total of over 300 employees, 60% of whom hold a Master’s degree or above. The MoEA, CEPD, and other ministries or bureaus have also recruited the support of a variety of think tanks, such as the China Economic Research Institute and the Taiwan Economic Research Institute. Altogether, these provide powerful support for the making of informed policies. Similarly in Korea, despite the rhetoric of globalisation, liberalisation, and the shrinking role of the government in matters of economic development, it remains the case that government economic and social policies have been made with the support of a multitude of research institutes. The Korea Development Institute (KDI), which formerly provided support to the Economic Planning Board (dismantled in 1994) and currently the Ministry of Strategy and Finance, has a total of 90 researchers with doctoral degrees and remains one of the most prestigious and productive research organisations. Likewise, the Ministry of Information and Communications (reorganised under President Lee Myung-bak) was supported by the Korea Information Society Development Institute (KISDI), which also has a total of 90 researchers with Master’s or doctoral degrees. Similarly, the Electronic Technology Research Institute (the counterpart of Taiwan’s ITRI), which is overseen by the Ministry of Knowledge Economy, has more than 1,700 full-time researchers with Master’s degree or above. Indeed, there are many other government-funded research institutes in Korea that are charged with the

42. Apart from the 16 staff units, the Ministry of Economic Affairs is also made up of 14 administrative agencies, 6 national corporations, and 64 overseas commercial offices. The Industrial Development Bureau, which is one of the administrative agencies, works closely with business enterprises and the Industrial Technology Research Institute in the building of consortiums of new industrial venture.

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responsibility of studying various aspects of the information technology sector and economic development more generally. Private research institutes, such as the Samsung Economic Research Institute, also provide intelligence to the government and other actors. In short, the “policy inertia” of the Tsang regime resulted not only from the senior bureaucrats’ ideological disposition; it was also compelled by the deficit in its policymaking capacity.

3.3 Bureaucratic Polity —  Bifurcation of Political Appointees and Civil Servants Finally, the Hong Kong government’s deficiency in policy-making capacity has not been helped by its dispersal of authority in making policy decisions. The appointment of Policy Commissions independent of the bureaucracy has, according to Ma, resulted in: “rule-making authority of various policy areas in Hong Kong [being] dispersed among various organs … [and the] SAR government sometimes failed to make the government-owned corporations and governmentappointed statutory bodies obey government initiatives. They formed alternative foci of power which in turn served to constrain government’s actions …” [43]

The cultural and institutional shortcomings for policy-making in Hong Kong have been noted by the former Chief Executive, C. H. Tung, who is far more receptive to the practice of long-term development planning. It was partly in response to this deficiency that Mr. Tung introduced the “Principal Officials Accountability System (POAS)”, a ministerial system of political appointment, at the beginning of the second term of

43. Ngok Ma, Political Development.

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his appointment.[44] Although the practice may allow the Chief Executive to appoint officials who are more willing to explore long-term planning, it can hardly fill the “research deficit” described earlier. Furthermore, as quite a number of observers have contended, these politically appointed officials, not being disciplined by political parties or other mechanisms for remaining loyal to the Chief Executive, would require a lot of political tact to manage.[45] In particular, officials aspiring to become a future Chief Executive might act in subterfuge and undermine the incumbent Chief Executive’s authority. Above all, because the centralisation of “policy powers in the hands of the Chief Executive and his ministerial team” has been achieved “at the expense of the bureaucracy dominated by Administrative Officers (AOs)”,[46] the system has inadvertently resulted in the bifurcation of the political appointees and career civil servants, leading to a gradual disjunction between politics and bureaucracy. The superimposition of a layer of politically appointed “ministers” threatens to alienate the senior civil servants, which is hardly congenial to gaining their support in the processes of policy formulation and implementation. This is especially the case when the political appointees have to rely on “the loyalty, support and cognitive understanding of the administrative machinery” for policy implementation.[47] With Donald Tsang’s rise to power, he has relied more on experienced AOs to fill his cabinet.[48] To some extent, this has eased the overt and

44. See Anthony B. L. Cheung, “Policy Capacity” and Siu-kai Lau (2002), The First Tung Chee-hwa Administration: The First Five Years of the Hong Kong Special Administrative Region, Hong Kong: The Chinese University Press, 2002. In addition, according to Lau, the absence of a proactive civil service was not Mr. Tung’s only problem. The fact that he could not be affiliated with any political party and therefore faced difficulties in lobbying support to policies in both the Executive Council and Legislative Council was just as damaging. The POAS was also introduced to relieve Mr. Tung of the task of political persuasion. 45. According to Ma, given the regulation against political party affiliation, the Chief Executive cannot use his wide range of appointment power to engineer a cohesive ruling coalition. See Ngok Ma, Political Development. 46. Anthony B. L. Cheung, “Policy Capacity”, p. 55. 47. Anthony B. L. Cheung, “Policy Capacity”, p. 57. 48. In May 2008, Donald Tsang sought to further develop the political appointment system by appointing undersecretaries and political assistants. See Government Information Service, “CE appoints Under Secretaries (with photos)”, press release on 20 May 2008, www.info.gov.hk/gia/general/200805/20/ P200805200121.htm, accessed 1 July 1 2011.

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fiery tensions between the political appointees and career civil servants that characterised the Tung regime. However, the negative impacts exerted by POAS, which led to disjuncture on policy formulation and policy implementation, cannot be kept down by esprit de corps alone. This perhaps explains the policy disasters that surfaced during the last days of Donald Tsang’s administration.[49]

4.  Policy Inertia — Socio-political Constraints Apart from the beliefs and institutional set-up of the civil bureaucracy, policy stagnation during much of the SAR and, specifically, Donald Tsang's regime has also stemmed from social-political constraints. In the eyes of some observers, this is a problem of heightened demands for accountability and a deficit in legitimacy.[50] Yet other scholars have characterised it as the inability of the executive-legislature and government-society interfaces to facilitate the aggregation of divergent interests. One way to understand these social-political constraints is to note the wide-ranging criticisms that have been lodged against attempts on the part of the SAR government whenever it tries to introduce policies that have developmental implications.

4.1 The West Kowloon Cultural District A most pertinent case would be the West Kowloon Cultural District.

49. John Tsang’s 2011 Budget Speech, which changed drastically from insisting on financial prudency to the indiscriminate dole out of HK$6,000, is a case in point. See Hong Kong Economic Journal, “Jinyong Eewei Sui Wen, Zhengfu Que Wu Yuanjian” (“Status of financial center uncontested, yet government visionless”), Hong Kong Economic Journal, 5 May 2011, p. 16; Xingzi Lin, “Beijing Muoxu Gaoguan Wuyang, Mangang Dinang Gangren Daomei” (“Beijing’s tacit consent to the ‘safety’ of top officials; muddleheaded and incompetence to the disaster of Hong Kong people”), Hong Kong Economic Journal, 6 April 2011, p. 20. 50. Ian Scott, for instance, suggested that Tung’s rule began with a legislature that was not representative and therefore not possessed the moral authority to rule; Tsang’s situation was not much better. Ian Scott, “Legitimacy”, p. 33. See also Chi-keung Ivan Choy (2002), “Cong Jimingdi Guanliao Zhengti dao Tequ Mincui Zuanquan Zhengji” (“From Colonial Bureaucratic Polity to ‘Populist-Despotic’ Politics of the Special Administrative Region”), in Thomas K. C. Tse (Ed.,) Our Place, Our Time. Hong Kong: Oxford University Press, pp. 258–288; Eliza W. Y. Lee, “Governing”.

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Once again, it was first proposed in C. H. Tung’s 1998 Policy Address, which intends to boost Hong Kong’s attraction as a tourist destination by developing the territory into Asia’s hub for art and culture. The project proved highly controversial. First and foremost, critics were sceptical of the possibility of developing a hub artificially. They do not think the low level of local interest in culture and art can sustain the grand scale of the Cultural District; they also question if government initiatives can cultivate a cultural audience. Second, local performers, artists, and cultural critics believe that the Cultural District has been designed to privilege artists and performers from outside Hong Kong. They question the extent to which the mega-project could benefit the local cultural community. Related to this point is the criticism that the Cultural District is too expensive for the working class. In view of the fact that the Cultural District is built with taxpayers’ money, critics contend that it is deplorable that the design has made little provisions for inexpensive eateries and discounted admission options that target the grassroots. In view of the above points, critics also suggest that the large amount of investment can be used more profitably for other purposes that benefit the poor and the marginalised population. Above all, the original proposal recommended that the entire Cultural District was to be developed by a single real estate company, which would be given ample opportunity to developing the land into luxurious business and residential buildings as a means to “support” the operation of the Cultural District. This proposal has aroused protests from both the general public and the real estate developers on what they consider to be a clear case of government-business collusion. To address the above concerns, the original design, first selected after an international competition in 2001, was put aside and a new round of consultation began in 2006. Nonetheless, a new round of consultation could only lower but could not suppress the voices of dissent. One further point to note concerning these dissensions is the fact that, except for the criticism of favoritism, major capitalists in Hong Kong have not made any collective or individual criticisms against the West Kowloon Cultural District plan put forward by the Tsang regime. Although one may interpret this as a sign of acquiescence, the capitalists’ overwhelming concern with the implications for property development suggests that they may read

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the West Kowloon Cultural District plan solely from the perspective of real estate development; and they may care much less about the cultural industry or new technology.

4.2 The Decline of Legitimacy in the Tsang Regime With this understanding, it would perhaps be more appropriate to consider the unwillingness to comply among the general Hong Kong population as a manifestation of the predicament of the bureaucratic polity, or as the failure of the interfaces between the executive and the legislature and between the state and society in maintaining the legitimacy to rule. As most observers have pointed out, there has been a gradual increase in the number of political organisations, social movements, and other social and political actors with the introduction of representative government in the aftermath of the Sino-British Declaration. The level of social mobilisation has continued if not heightened and there has also been an increase in demand for accountability after the handover.[51] Despite this growing demand from Hong Kong society, the Basic Law has put into place a nominally executive-led government, which neither enables bureaucratic domination nor facilitates the effective aggregation of divergent social and political interests. According to Yash Ghai, the Basic Law has made provision for an “executive-led” government, allowing at the same time for the rule of the business elite as well as a steering position for the central government.[52] Initially, only half of the legislators were elected directly, while the other half were elected indirectly through various functional constituencies. In addition, legislators have no influence over the appointment of senior government officials, have experienced massive reduction in their ability to initiate members’ bills, and have no constitutional power to

51. Alvin Y. So (2011), “The Transformation of Social Movements in Hong Kong after 1997”, in Jeffrey Broadbent and Vicky Brockman (Eds.,) East Asian Social Movements: Power, Protest and Change .New York: Springer, pp. 365–384. 52. Yash Ghai (1997). Hong Kong’s New Constitutional Order: the Resumption of Chinese Sovereignty and the Basic Law. Hong Kong: Hong Kong University Press.

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overturn government policies.[53] By contrast, the business elite gain disproportionate influence over the government owing not only to their position within the Executive Council, but also to the arrangement of functional constituencies that gives them undue influence in the Legislative Council and the selection of the Chief Executive, as well as to their privileged access to the governing elite in Beijing. If the business elite have historically depended on the goodwill of the bureaucratic elite for political appointment in colonial Hong Kong, the relationship has been reversed in the post-handover era. To a greater extent than the popularly elected Legislative Councillors, government officials have to seek the support of the business elite and their representatives in many policy initiatives. Describing this relationship, Boyd and Ngo suggest that “informal and extra-legal relationships have increasingly affected the exercise of government authority”, with the result that the government often makes decision favourable to the business establishment.[54] Bureaucratic-domination, which was the intended outcome of the executive-led government, is no more than nominal. The ostensible probusiness constitutional arrangement and policy inclinations have become transparent to the general public, feeding their discontent and scepticism over time. Such cynicism is hardly helpful to the making of development plans; for the latter are not risk-free and by definition it takes a long time for benefits to materialise. The tendency for the general public to see the top-down imposition of economic policies as ineffectual and to associate them with acts of government-business collusion has prevented any rational discussion of government deliberation of economic projects. In time, it has marred the government’s capacity for policy-making and the ability of governance in general. In turn, although the legislators (especially the pan-democratic ones) cannot overturn government policies, they can “veto the allocation of public funds for policy implementation … or refuse to support any enabling legislation”, which means they possess a certain leverage over

53. Anthony B. L. Cheung, “Policy Capacity”. 54. Richard Boyd and Tak-wing Ngo (2005). “Asian States: Beyond the Developmental Perspective”. London: RoutledgeCurzon.

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the government.[55] Despite the nominally executive-led government, government officials have to work with and seek support from legislators. More important, despite winning the majority in direct elections through the geographical constituencies, the pan-democratic legislators have often been marginalised by the government in its consultation exercises and out-voted according to the rule of separate counting in the Legislative Council. In addition, as the pan-democratic legislators cannot, as a group, hope to ascend to the position of a ruling party, they tend to be highly outspoken. Referring to the later years of C. H. Tung’s regime, Choy described the vicious cycle whereby the pan-democratic legislators’ tendency to inflict acrimonious criticisms on the government incited proestablishment legislators to do the same.[56] The same situation has been found recently, making for the weakening of the policy-making capacity of the government and the deterioration of its legitimacy to rule.

5.  Conclusion We noted at the beginning of this chapter that Hong Kong is confronted with tremendous economic challenges. Not only has Hong Kong lost much of it competitiveness in relation to the global economy, but it also needs to re-negotiate its relationship to cities in China. The Donald Tsang regime has taken some novel steps, such as calling for an Economic Summit in 2006 and forming the Task Force on Economic Challenges in 2008. However, the actual ideological and institutional changes have been minimal. We agree with most observers that policy inertia on the part of Donald Tsang and his team has stemmed from their dogmatic adherence to economic non-interventionism, a dogma that some observers consider not to have existed even in the colonial days.[57] In addition, we try to show

55. Anthony B. L. Cheung, “Policy Capacity”, p. 55. 56. Chi-keung Ivan Choi, “Cong Jimingdi”. 57. Leo F. Goodstadt (2001). “Reluctant Regulators: How the West Created and How China Survived the Global Financial Crisis”. Hong Kong: Hong Kong University Press.

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that policy inertia has also flowed from the lack of research available to the government. A great deal of in-depth research is needed to initiate any successful development policy in the present era of globalisation, but the Hong Kong civil bureaucracy has not been built for such a purpose. Coupled with the bifurcation between political appointees and career civil servants, an inadvertent (albeit medium-term in our opinion) outcome associated with the introduction of the ministerial system (POAS), the result is that the Tsang regime is poorly equipped to lead. Finally, we also agree with most observers that the failure of the executive-legislature and government-society interfaces to aggregate divergent interests has not helped the Tsang regime to formulate and implement development policies. Above all, the nominally executive-led government that was put into place by the Basic Law has, more than the government in the colonial era, to take heed from the businessmen and, at the same time, has bred much distrust among the general public. Policy innovation will be very difficult, if not practically impossible, in such a situation. Indeed, occurrences during the last months of Tsang’s rule seem to reinforce if not justify this distrust. Donald Tsang himself was found to have purchased a Shenzhen apartment at a much discounted price from a local real estate developer. Similarly, Rafael Hui, a former Chief Secretary, is being charged by the Independent Commission Against Corruption (ICAC) for accepting benefits from another local real estate developer. Finally, the new Chief Executive, C. Y. Leung, has been found to have forgotten to reveal the potential conflict of interests when he served as one of the adjudicators for the international competition on the design of the West Kowloon Cultural District in the early 2000s. Blatant government-business collusion, as revealed in the above occurrences, suggests strongly that real estate developers in Hong Kong, being the main beneficiaries of the present political-economic setup, are only concerned with short-term interests and returns to their investments. They abhor government regulation of their activities and disdain efforts to plan for economic transformation. In turn, the occurrences also lead one to suspect that, given the strong vested interests of the government officials, the Tsang regime might have been half-hearted if not totally unwilling

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to formulate long-term strategic development policy so as not to upset (or challenge) the hegemony of the big developers. As the beneficiaries of the existing power structure, they are unlikely to want to introduce development policies that facilitate the surge of new political-economic forces that threaten their positions. Given the above analysis, we think that major political overhaul will be necessary in order to re-instate effective leadership in the Hong Kong government. Since the institutional set-up of the Hong Kong government is not equipped for long-term, effective policy planning, direct election will not immediately solve this problem. Nonetheless, whether Hong Kong could move into a situation where the government can provide more guidance in social and economic matters is a major question for public debate, and commensurate changes in the political system are necessary to effect such a discussion. A change in the political system is also necessary to accommodate strong civil society surveillance of the governmentbusiness collusion, which, as events of the last months of Donald Tsang’s rule have suggested, may have thwarted any government attempt to plan for developmental transformation.

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C h a pt er 9

Review of the Health System Grace CHENG Chief Librarian, Hong Kong Hospital Authority

1. Introduction Donald Tsang, the Chief Executive of the Hong Kong Special Administrative Region (HKSAR) from June 2005 to June 2012, promised during his re-election campaign in early 2007 that healthcare reform would become one of his most important jobs. Based on a comprehensive review of the literature and publicly available documents, this chapter sets out to examine the issues and challenges for Hong Kong’s health systems arising from the transitions in global and local environments. It studies the policies and developments of Hong Kong’s healthcare financing, delivery and regulatory systems before and during the Tsang administration with a view to assessing how much and how well this important job has been done.

2. Changing Paradigm in Health, Health Determinants and Healthcare The ageing population (with higher elderly dependency), the increase in economically active population particularly in the low income group, the

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widening gap between the rich and poor and the increase in the one-person elderly households pose challenges for policy makers from their potential destabilising effects on society and the likely increase in disease burdens especially chronic conditions from the elderly and low income groups.[1] Hong Kong is no different from the rest of the world in the shift of disease burdens from acute diseases to chronic conditions,[2] [3] as is evidenced in the thematic household surveys: 28.2% of persons in 2009– 10 compared with 13.9% in 2001 had chronic health conditions; chronic conditions are identified at younger age (median age in 2009/10: 56; in 2001: 59).[4] Chronic conditions are closely related to lifestyle and socio-economic status. Recent studies [5] [6] [7] show that in the absence of a set of risk factors, middle-aged men of 55 have a higher probability of survival in a healthy state until 85 years of age. The risk factors include hyperglycaemia, hypertension, high alcohol consumption, low education, overweight, high triglyceride level, low grip strength and being unmarried. Chronic conditions could be prevented by reducing risk factors such as lifestyle (e.g., healthy diet, exercise), behaviour changes (e.g., smoking cessation), or improvements in the environment (e.g., cleaner air, hygienic living condition).

1. Grace Cheng, “Review of the Health System”, in J. Y. S Cheng (ed.), The Hong Kong Special Administration Region in its First Decade (Hong Kong: City University of Hong Kong Press, 2007). 2. R. Horton, “The neglected epidemic of chronic disease”, Lancet, Vol. 366, No. 9496 (2005), pp. 1514. 3. GM Leung, “The challenge of chronic conditions in Hong Kong”, Hong Kong Medical Journal, Vol. 8. (2002), pp. 376–8. 4. Thematic Household Survey Reports nos. 8 and 45, (Hong Kong, Census and Statistics Department, 2002 and 2010). www.censtatd.gov.hk/home/index.jsp. Accessed 3 September 2012. 5. J. Gruman, “Introduction for superhighways for disease”, Psychosomatic Medicine, Vol. 57 (1995), p. 207. 6. B. J. Willcox et al., “Midlife risk factors and health survival in men”, JAMA, Vol. 296 (2006), pp. 2343–50. 7. M. J. Stampfer, “Primary prevention of coronary heart disease in women through diet and lifestyle”, New England Journal of Medicine, Vol. 343 (2000), pp. 16–22.

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Chronic conditions, especially with the elderly, are characterised by the presence of co-existing illnesses,[8] [9] [10] frequent re-admission to hospital when complications arise, and the need to follow up on longterm medications and continued investigations.[11] Therefore the utilisation of health services is affected. These could be avoided and prevented by addressing risk factors such as lifestyle (e.g., healthy diet, exercise), behaviour changes (e.g., smoking cessation), or improvements in the environment (e.g., cleaner air, hygienic living conditions). There is a paradigm shift in healthcare world-wide from regarding cure as an uncompromised goal to the adaptation of interventions to diseases for which there is no cure. There is a need to design a health system with integrated disease prevention and management strategies, including longterm, continuous, multidisciplinary care centred around primary care inside and outside the health system. The focus is more on adherence to treatments and facilitation of patients’ compliance and/or palliative treatment. Episodic care around the hospital setting would in fact be inappropriate and costly.[12] High quality primary care is associated with better health outcomes.[13] As declared by the World Health Organization (WHO), it is the key to attaining the target of health for all.[14] There was consensus in the initiatives of the WHO and the European Community since the mid-1990s that the determinants of health are not only restricted to socio-economic status or personal behaviours alone, but are also due to government policies and actions. Can Hong Kong

8. G. P. Westert, “Patterns of comorbidity and the use of health services in the Dutch population”, European Journal of Public Health, Vol. 11, No. 4 (2001), pp. 365–72. 9. E. H. Wagner, “Meeting the needs of chronically ill people”, BMJ, No. 323 (2001), pp. 945–6. 10. C. L. K. Lam, I. J. Lauder, T. P. D. Lam, “Impact of chronic diseases in health services and quality of life of a Chinese population,” Asia Pacific Family Medicine, Vol. 2 (2003), pp. 98–106. 11. J. Cheah, “Chronic disease management: a Singapore perspective,” BMJ, No. 323 (2001), pp. 990–3. 12. G. M. Leung, “Hospitals must become ’focused factories’”, BMJ, No. 320 (2000), pp. 942–3. 13. S. Greenfield, et al., “Outcomes of patients with hypertension and non-insulin-dependent diabetes mellitus treated by different systems and specialities: Results from the medical outcomes study”, JAMA 274 (1995), pp. 1436–44. 14. The Alma-Ata Declaration (Geneva: World Health Organization), www.searo.who.int/sitemap/ aboutsearo.htm. Accessed 24 February 2007.

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government’s health policies and strategies serve to meet the changing needs? It is in this context that the assessment of the work of the Donald Tsang administration is based.

3. Health System Financing in Hong Kong The financing of healthcare in Hong Kong is reliant on government funding from general taxation and the good economic conditions. As a whole, resources from the government were available to satisfy the increasing demands for healthcare. The 1999 Harvard Report described the Hong Kong health policy as a “policy of benign neglect”.[15] At this point, the government, apart from issuing an explicit statement in 1997, has neither explicitly defined its financial responsibilities, nor spelt out the role of the public sector within the healthcare system. “The government’s healthcare policy is that no one should be denied adequate medical treatment through lack of means. To this end, it provides a range of services and facilities to complement those available in the private sector and to meet the needs of the less-affluent patients”. [16]

Calling the Hong Kong health financing system a “non-system”, Hsiao and Li described the system as pluralistic, with a two-tiered healthcare financing structure. The government general revenue financed “Hospital Authority (HA) with a budget cap that pushes the cost increases to other stakeholders” by increasing user fees, and leaving the private sector to fill in the void.[17] In the private sector for personal healthcare, managed care in various forms has grown under the administration of the C. H. Tung and Donald Tsang since 1996/97.

15. W. Hsiao, et al., Improving Hong Kong’s Healthcare System: Why and for whom? (Hong Kong: the Printing Department, 1999). 16. Hong Kong: A New Era: a Review of 1997, (Hong Kong: Government Printer, 1998), p. 155. 17. W. Hsiao, K. T. Li, “Global trend in health financing and Hong Kong’s choice”, in International Symposium (on) Hong Kong Health System (Hong Kong: University of Hong Kong, 2006).

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3.1 Trends in Government Financing on Healthcare since 1997 Total health expenditure (public and private) reached HK$75 billion in 2006–07, up from HK$48 billion in 1996/97, with an average annual change in total expenditure of 4.8% under the Tung administration, and 4.65 per cent under the Tsang administration. The proportion of public sector health financing has gradually decreased in the Tsang administration, while private health spending has increased, both in actual terms and in proportion to public spending.[18] Analysed by government health expenditure per capita, the highest annual increase (11.3%) was at the beginning of C. H. Tung’s administration (1997/98 to 1998/99), but at its last year (2004/05) there was a downturn of 5.7%. In 2005/06, when Donald Tsang took up office, a budget cap was applied, and per capita expenditure was down (by 2.3%) again, followed by two years of slight growth. Tsang’s fourth, fifth and sixth years in office saw increases of 8%, 4.9% and 2.2% respectively in per capita health expenditure. There was a downward trend in government health expenditure as a proportion of Gross Domestic Product (GDP) from an average of 2.6% during the Tung period until 2004/05 to an average of 2.3% in the Donald Tsang years up to 2009. The data from available Domestic Health Accounts showed a similar pattern. Correspondingly, private health expenditure as a percentage of GDP rose from 2.2% in 1997–98 to 2.5% in 2006/07. [19]

3.2 Public/Private Share in Health Financing Particularly noticeable is the gradual shifting of the healthcare burden from the public to the private sector. During the C. H. Tung administration, it can be seen that the proportion of financing by private households has

18. Hong Kong’s Domestic Health Accounts Estimates of Health Expenditure, 1989/90–2006/07. (Hong Kong: Hong Kong SAR Food and Health Bureau) www.fhb.gov.hk/statistics/en/dha.htm, Accessed September 2012. 19. Ibid. Table 3.2.

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31400

31894

32357

34213

33199

34231

32199

31616

32127

33623

36706

38655

39855

11.3

2.5

N/A

2.1

Annual growth (%)

(d) Public expenditure on Health as a % of GDP#

2.6

0.2

4807

2.7

4.8

5088

Average: 2.6

2.5

1

4855

2.7

3.6

4906

2.7

2.6

5032

2.7

-5.7

4747

2.3

-2.3

4640

2.1

1

4685

Average: 2.2

2.2

3.6

4855

2

8

5260

#Source: CUHK Hong Kong Quality of Life Index, Appendix 2, Data for Compiling the CUHK Hong Kong Quality of Life Index. Released Aug 2010.

*Source: Hong Kong Annual Digest of Statistics 2001, 2006, 2010, 2011.

4799

4312

2.3

4.9

5519

N/A

N/A

2.2

5939

6489300 6543700 6606500 6665000 6724900 6787000 6803100 6783500 6813200 6857100 6925900 6977700 7003700 7067800

27982

(c) Per capita Expenditure on Health (a)/(b) ($)

(b) Mid-year population

(a) Public Expenditure ($M)

The Donald Tsang Administration

1997–98 1998–99 1999–00 2000–01 2001–02 2002–03 2003–04 2004–05 2005–06 2006–07 2007–08 2008–09 2009–10 2010–11

The CH Tung Administration

Table 9.1 Government Expenditure on Health, 1997–98 to 2010–11

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Figure 9.1 Total Health Expenditure by Source, 1997/98–2006/07

Proportion of Health Expenditure

100% 90%

Others

80%

Non-profit Institutions

70%

Insurance

60%

Employers

50%

Households

40%

General Government

30% 20% 10% 0%

Year 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 C. H. Tung Administration

Donald Tsang Administration

Source: Hong Kong’s Domestic Health Accounts Estimates of Health Expenditure, 1989/90–2006/07 www.fhb.gov.hk/statistics/en/dha.htm. Accessed September 2012.

been going downwards from 35% to 32%, while it rose again to 34–35% in the Tsang administration (2005/06 to 2006/07) (Figure 9.1). Private insurance has more than doubled from HK$1,961 million (3% of total health expenditure) in 1997/98 to $4,213 million (6% of total health expenditure) in 2006/07.[20] The share of government spending over total health expenditure has proportionally shrunk from the highest level of 58% during the C. H. Tung period in 2003/04 to 50% during the Tsang period up to 2006/07 (Figure 9.1). Within private health expenditures, private insurance accounted for a mere 6% in 1997–98, and increased markedly to 11% in 2006–07 while health expenditures by employers proportionally shrank. The proportion of out-of-pocket household payments stayed at more or less the same level in the same period (72% and 70% respectively) (Figure 9.2).

20. Ibid. Table 2.2.

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Figure 9.2 Mix of Private Health Expenditure, 1997/98–2006/07

Proportion of Private Health Expenditure

100% 90%

Others

80%

Non-profit Institutions

70%

Insurance

60%

Employers

50%

Households

40% 30% 20% 10% 0%

Year 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 C. H. Tung Administration

Donald Tsang Administration

Source: Hong Kong’s Domestic Health Accounts Estimates of Health Expenditure, 1989/90–2006/07 www.fhb.gov.hk/statistics/en/dha.htm. Accessed September 2012.

3.3 Expenditure by Providers/Functions Public health expenditures are incurred mostly in funding hospitals (around 70%). The years of the Tung administration saw a further increase of expenditure on hospitals from 69.8% (1997/98) to reach 72.5% in 2004/05, while a decrease of public spending at ambulatory services occurred in its last two years (from 11.2% to 9.6%). The trend seems to have been reversed in the first two years of the Tsang administration, when the proportion of expenditure for hospitals decreased consecutively from the highest level (73.7%) to 71.9% in 2006/07.[21] Private expenditure was incurred mostly by clients of ambulatory services. In the private market, spanning both the Tung and Tsang administrations from 1997/98 to 2006/07, it is worth noting that there was

21. Ibid. Table 3.2.

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Figure 9.3 Public and Private Share of Health Expenditure by Function, 2001/02 and 2006/07 Function

Services of curative care

2001/02

Inpatient curative care

2006/07 2001/02

Day patient hospital services

2006/07 2001/02

Ambulatory services

2006/07 2001/02

Home care

2006/07 2001/02

Rehabilitative and extended care

2006/07 2001/02

Long-term care

2006/07

Prevention and public health services

2001/02

Health programme administration and health insurance

2001/02

2006/07

2006/07 2001/02

Investment in medical facilities

2006/07 0%

20%

40% Public

60%

80%

100%

Private

Source: Hong Kong's Domestic Health Accounts: Estimates of Health Expenditure, 1989/90–2006/07. Accessed September 2012.

progressive decrease in the share of expenditure on ambulatory healthcare (from 64.2% to 52.3% over total private expenditure). There was a corresponding progressive increase in the private expenditure on hospitals (from 8.7% to 13.8% over total private expenditure). Actual private health expenditure increased 95% (from HK$2,655 million in 1997/98 to $5,182 million in 2006/07). It is also true of general health administration and insurance (from 5.3% to 6.7% over total private expenditure) and nursing and residential care (from 0.6% to 1.6%).[22] A detailed analysis of the relative public/private share of health expenditure by function (Figure 9.3) in 2006/07 compared with 2001/02

22. Ibid. Table 3.3.

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reveals that the public share (%) weakened in three major functional areas of care in the first five years of the Tsang administration. In money terms, public share (%) decreased for almost all functions — hospital inpatient care (79 : 21 in 2001/02, 69 : 31 in 2006/07), ambulatory services (38 : 62 in 2001/02, 33 : 67 in 2006/07), and long-term care (90 : 10 in 2001/02, 83 : 17 in 2006/07) — while the public share for rehabilitation and extended care remained at more or less the same level (96 : 4 in 2001/02, 97 : 3 in 2006/07).[23]

3.4 Population Entitled to Medical Benefits Declined During the Donald Tsang administration, despite an apparent increase in public sector health expenditure (total and per capita wise), it declined as a share in GDP , while the government’s relative share in total health financing in relation to private expenditure has been slowly moving downwards. The coverage by the public sector has weakened primarily in three major functions: inpatient care, ambulatory services, and longterm care. Private health insurance expenditure is on the rise, and in relative terms, and is spent increasingly on hospital services rather than ambulatory services. Nonetheless, due to the shrinkage of employer-based medical benefits, a higher number and proportion of the population are not covered by any form of medical insurance (from 3.76 million (56.5 % of the population) in early 2001 to 3.84 million (57.3%) in 2009/10).[24] The level of public expenditure on healthcare over GDP (2.3%) is still low when compared with Taiwan (5.8%), U.K. (7.5%), Australia (9.1%), Canada (9.4%) and U.S. (13.9%) and other Organization for Economic Co-operation and Development (OECD) countries. The WHO, in its study of world health system financing, stated that if the proportion of public expenditure and/or compulsory insurance over GDP is under 5–6%, “they are unable to make sufficient provision to subsidise the poor”.[25]

23. Ibid. Table 4.5. 24. Thematic Household Survey Reports nos. 8 and 45. 25. World Health Report: Health System Financing, the Path to Universal Coverage (Geneva: World Health Organization, 2010), p. 88.

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The Tsang government would argue that the low percentage should be considered in conjunction with Hong Kong’s low tax level and the government’s stringent control on expenditure for the sake of fiscal prudence, and not a sign of real financial difficulty. This line of argument would invite criticism since Hong Kong has been enjoying continuously abundant fiscal reserves for many years (except perhaps during the period of the global financial crisis in 2003), and there was a higher average annual change/growth in GDP in the years of the Tsang administration (average of 4.33% per annum from 2005/06 to 2009/10 compared with an average of 2.93% in the years under C. H. Tung).[26]

4. Performance of the Health Delivery System The performance of the HKSAR government and that of the community in the health delivery system in this period as a whole was mixed. The Harvard Report acknowledges that the government has lived up to its principle that no one should be deprived of care for lack of means in providing everyone with equitable “access to essential healthcare regardless of their financial means”. The operationalisation of living up to this principle is increasingly difficult, when the problems of rising demand and rising healthcare costs have been exacerbating. The government has become more specific lately on what it sets out to do, by stating in its 2010 health consultation document “My health, my choice”, that it is “set to uphold the public healthcare system as the safety net for the whole population”.[27]

4.1 Access and Quality of Care Healthcare in Hong Kong historically is largely episodic, characterised by doctor-shopping behaviour (defined as changing of doctors without professional referral in the same illness episode). General outpatient

26. Hong Kong Annual Digest of Statistics, various years. 27. My Health, My Choice: Healthcare Reform Second Sage Consultation Document. (Hong Kong: Bureau of Food and Health, 2010).

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services in Hong Kong are delivered mainly by the private sector. In Hong Kong, family doctor practice is not commonplace and there are few Family Medicine specialists in the community due to the comparatively late introduction of this qualification in Hong Kong. The first point of care is not necessarily a primary care facility or a family doctor. Family doctors are regarded as a “luxury” [28], and more than 50% of patients paid more than HK$300 (almost twice of the charge of a general practitioner [GP]) for follow-up by a family doctor for diabetes and hypertension.[29] The government primary care clinics use a daily quota system as control and covered a small part (20% in the 1990s to 17% in 2001) of all outpatient episodes in Hong Kong. [30] In the public sector, a first appointment at a specialist out-patient clinic requires a referral from a GP, from both the private or public sector. Hospital care is primarily delivered by the public sector. The services of public hospitals improved after the setting up of the statutory HA in 1999 and they capture a large share of the total inpatient admissions (over 90% in the 1990s to 80% in 2001).

4.2 Private Out-patient Services Private sector out-patient attendances amount to about 26 million each year, accounting for about 70% of Western medicine consultations.[31] The volume includes both primary care and specialist out-patient clinic (SOPC) services. There are indicators of a decline in the share of consultations at private clinics in Hong Kong (from about 81% in 2001 to about 70% in 2009/10).[32]

28. Stewart W. Mercer, et al., “A qualitative study of the views of patients with long-term conditions on family doctors in Hong Kong”, BMC Family Practice, Vol. 11 (2010), p. 46. www.biomedcentral. com/1471–2296/11/46. 29. Albert Lee, et al., “The concepts of family doctor and factors affecting choice of family doctors among Hong Kong people”, Hong Kong Medical Journal, Vol. 16 No. 2 (April 2010), pp. 106–16. 30. Thematic Household Survey Report no. 8. 31. My Health, My Choice. 32. Thematic Household Survey Reports nos. 8 and 45. Note that data from these two reports are only broadly comparable due to variations in their definitions and the enumeration periods.

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Hong Kong’s private sector care is different from other countries in that it is not easy to differentiate primary care and specialist out-patient care consultations because referral is not required for private specialist care unless the patient is covered by employer or insurance benefits. Most private specialist doctors provide both primary and specialist care. In 2008, it was estimated that primary care consultations constitute 86% of the private Western out-patient consultations, and the rest (14%) were specialist consultations. Very few private doctors offer home visits, and if they do, the charge for a home visit is usually three to four times of regular consultation fee.[33] Studies pointed to the sub-standard management practices of Hong Kong private doctors, for example, in the management of asthma [34] and hypertensive patients.[35] Private solo practices where drug prescription and dispensing take place are usually supported by unqualified “nurses”. Yet, the most frequently cited factors for choosing the type of doctor consulted was not quality of care but rather consultation fee, followed by the location of the clinic.[36] The private sector fee for a service is not subject to government regulation. The Hong Kong Medical Association Survey on Doctors’ Fees showed that private doctors’ fees varied greatly. As at 2010, the median rates for general practice were HK$200, for specialist consultations $575, and for daily hospital attendance at third-class wards $700. These charges have been rising at an average annual rate of 2.8%, 3.8% and 4.2% respectively compared with 2006 levels. The highest average annual increases were seen in hospital out-patient charge outside regular clinic hours ($800, 15% for general practice and $1,000, 6.3% for specialist consultation).[37]

33. Ibid. 34. Fanny W. S. Ko et al., “Are Hong Kong doctors following the global initiative for asthma guidelines: a questionnaire survey on asthma management?”, Hong Kong medical Journal, Vol. 16 No. 2 (April 2010), pp. 86–93. 35. W. K. Chan et. al., “Management of hypertension by private doctors in Hong Kong”, Hong Kong Medical Journal, Vol. 12, No. 2 (April 2006), pp. 115–8. 36. Thematic Household Survey Report no. 8. 37. Report of doctors’ fees survey 2010. (Hong Kong: Hong Kong Medical Association, 2010).

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Figure 9.4 Patient Attendances at Primary, Secondary & Tertiary Care Points in Hong Kong, 1997–2010 7,000,000 6,000,000 General Out-patient 5,000,000

SOPC: Specialist Out-patient

4,000,000

A&E #

3,000,000

Hospital Discharges & Deaths

2,000,000

Public Hospitals

1,000,000

Private Hospitals

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 C. H. Tung Administration

Donald Tsang Administration

Source: Hong Kong Annual Digest of Statistics, Hong Kong: Census and Statistics Department, 1998–2012.

4.3 Public General Out-patient Services The usage of the publicly funded general out-patient clinics (GOPCs) peaked with 6.47 million patient attendances in 2000, the year before the handover of GOPCs from the Department of Health to the HA (2001–03) (Figure 9.4). Since then, the usage has fallen continuously and gradually to 5.3 million in 2009 (except in 2002 and 2008) and rises slightly to 5.4 million in the last year. The declining patient attendances at GOPCs might be attributed to a number of HA initiatives since 2005 to reduce volume of demand, including longer drug duration for chronic patients prescriptions, earlier opening hours, a new appointment system by phone (with a higher appointment default rate), and pilot shared-care programmes using private clinics.

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A telephone survey [38] found that GOPC patients tend to be older, poorer, chronically ill and less educated women. Private out-patients tend to be more satisfied with private practice overall, especially with better accessibility and person-focused care aspects. Other assessment scores, such as continuity of care, coordination (information system), and service comprehensiveness, were not significantly different. Chronic patients (public and private) tended to give higher scores. The study also found that most patients used both private practitioners and public GOPCs. Another study found that chronic patients tend to choose GOPCs rather than private GPs for regular follow-up.[39] Studies found the prevalence of doctor-shopping behaviour [40] [41]— in nearly 40% of patients under study at the public GOPCs. The use of a first-come-first-served quota system in the public sector healthcare, accompanied by efficiency measures, meant a less than ideal clinical management of patients. The duration of clinical encounter was too short (five minutes or less) and the waiting time too long, which might also contribute to doctor-shopping behaviour between public/private caregivers.

4.4 Public SOPCs Patient attendance at SOPCs reached a maximum of 6.1 million in 2002. The volume fell in the next four years (2003–06). In the period of the Tsang administration, it picked up again from 2007 and returned to its 2002 peak level of 6.3 million in 2010. The specialties with highest usage and continuous growth are Medicine (average annual growth 3.3% since

38. Samuel Y. S. Wong, et al., “Comparison of primary care experiences among adults in general outpatient clinics and private general practice clinics in Hong Kong”, BMC Public Health, Vol. 10 (2010), p. 397. www.biomedcentral.com/1471–2458/10/397. 39. Albert Lee, et al., “The concepts of family doctor”. 40. A Lo, et al., “Doctor-shopping in Hong Kong: Implications for quality of care”, International Journal for Quality in Health Care, Vol. 6, No. 4 (1994), pp. 371–381. 41. R. P. L Lee, “Change of doctors among different segments of urban population in Hong Kong”, Journal of the Hong Kong Society of Community Medicine, Vol. 13 (1982), pp. 207.

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Figure 9.5 Patient Attendances at Specialist Out-patient Clinics, 1997–2010 2,000,000 1,800,000

Medicine Surgery

1,600,000

Orthopaedics & Traumatology

1,400,000

Obstetrics & Gynaecology

1,200,000

Paediatrics Eye

1,000,000

Ear-Nose-Throat Psychiatry

800,000 600,000 400,000 200,000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 C. H. Tung Administration

Donald Tsang Administration

Source: Hong Kong Annual Digest of Statistics, 1997–2011 editions. Hong Kong: Census and Statistics Department, 1998–2012.

1997), Surgery (1.6%), Eye (4.2%), and Psychiatry (7.8%), although the rates slow down in the last 7 years (Figure 9.5). The use of Obstetrics and Gynaecology and Paediatrics SOPCs has been in decline since their peaks in 2002 and 1998 respectively.[42] The relatively slower growth was accompanied by much longer waiting time for some specialties’ appointments at the public SOPCs. [43] The

42. Hong Kong Annual Digest of Statistics, 2001–2011 editions. Tables (Hong Kong: Census and Statistics Department, 2002–12). 43. Chief Executive’s Progress Reports on Key Performance Indicators (KPIs), (Hong Kong: Hospital Authority, June 2006, February 2009, September 2010, March 2012).

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75th percentile waiting time in the period from 2007 to 2012 for first appointments in routine cases in Medicine SOPCs lengthened from 40 to 47 weeks, in Orthopaedics from 60 to 77 weeks. On the other hand, waiting times were shorter for Psychiatry (from 54 to 22 weeks), Surgery (from 82 to 57 weeks) and Paediatrics (from 23 to 17 weeks). The latest reporting period April 2011–March 2012, however, saw a lengthening in waiting times again for these specialties. At the same time, there are great variations in waiting times amongst hospital clusters. Patients with chronic illnesses are seen by GOPC and SOPC at the same time. It was pointed out during the discussions on doctors’ work reform in public hospitals that there has been work overlap between GOPCs and SOPCs. Chronic patients with stable conditions are being followed up at the SOPCs. GOPC’s gatekeeper role has been overlooked, [44] although it was pointed out that about one-third of GOPC doctors have not received formal training in family medicine. [45] Patients regarded public healthcare system as the appropriate place for managing their long-term conditions for “cost, consistency, information continuity, prescription duration, quality, trust, access to specialists and allied health professionals (inhouse referrals) and access to tests and investigations”. At the same time, they cited “access, waiting times, a lack of personal continuity, short consultations, and poor attitude of [public] doctors” as problems in the public care sector.[46]

4.5 Accident and Emergency Service a.

High growth until 2001

The usage volume of Accident and Emergency (A&E) services at public hospitals in Hong Kong grew at average of 4.6% per annum from 1997 to 2001, reaching a peak at 2.52 million attendances in 2001. Wai and

44. Final Report on Work Reform — Appendices. (Hong Kong: Hospital Authority, 2011). www.ha.org.hk/ haho/ho/hesd/Appendices.pdf. Accessed 15 March 2011. 45. Samuel Y. S. Wong et al., “Comparison of primary care experiences”, p. 397. 46. Stewart W. Mercer, et al., “A qualitative study of the views of patients”, pp. 5–6.

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colleagues in their 5-year study pointed out that 75% of the attendance as at 2001 were category 4 (semi-urgent cases) and category 5 (non-urgent cases) triage patients.[47] Law and Yip [48] attributed this high demand to the 24-hour coverage, and the perceived higher quality of care in public A&E services compared with care received at private clinics. Others pointed to the free service available at A&E departments. In addition, the high utilisation of A&E services by non-urgent case patients may be due to the perceptions of patients that their conditions are “emergencies” and that hospital services are of better quality. [49] [50] Non-urgent cases could have been seen by GPs.[51] The reasons given by patients were: affordability, patient’s wish to continue treatment at the same hospital and GOPC doctors’ inability to make proper diagnosis.[52] Another study found that 53% of the A&E attendances were self-directed, rather than by referral from the GP (7%).[53] A&E in part generates its own work and contributes to the work of SOPCs, resulting in patients defaulting on SOPC appointments and “doctor shopping” at SOPCs.

b.

Decline 2003–06

There was a marked decline to about 2 million attendances in this period. The immediate trigger seemed to be a new charge of $100 imposed in November 2002 on A&E attendance in response to the Harvard Report,

47. A. K. C. Wai, et al., “Analysis of trends in emergency department attendances, hospital admission and medical staffing in a Hong Kong university hospital: 5-year study.” International Journal of Emergency Medicine, No. 2 (2009), pp. 141–148. 48. C. K. Law, P. S. Yip, “Acute care service utilisation and the possible impacts of a user-fee policy in Hong Kong”, Hong Kong Medical Journal, Vol. 8, No. 5 (Oct 2002), pp. 348–53. 49. A. Lee, et al., “Morbidity patterns of non-urgent patients attending accident and emergency departments in Hong Kong: Cross-sectional study”, Hong Kong Medical Journal, Vol. 7, No. 2 (2001), pp. 131–8. 50. A. Lee, et al., “How to minimise inappropriate utilisation of Accident and Emergency Departments: improve the validity of classifying the general practice cases amongst the A&E attendees”. Health Policy Vol. 66, No. 2 (2003), pp. 159–68. 51. A. Lee, et al., Why Patients Utilise Accident & Emergency Department Services with Conditions That Would Be Treated by General Practitioners?, (Hong Kong: Chinese University of Hong Kong, 2004?) www.cuhk.edu.hk/med/cmd/research_recent.html. Accessed 24 February 2007. 52. A. Lee, F. L. Lau, C. B. Hazlett, “Factors associated with non-urgent utilisation of Accident and Emergency services: A case-control study in Hong Kong”. Social Science & Medicine, Vol. 51 No.7 (1 Oct 2000), pp. 1075–85. 53. J. Johnston, “Evidence from 10 years of health services research in Hong Kong”, in International Symposium (on) Hong Kong Health System.

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N/A

83%

N/A

86%

96%

100%

100%

97%

May 2005– Apr 2006

2049129

May 2004– Apr 2005

2073792

2128718

2005

90th perc 166 mins

86%

96%

100%

Jan-Dec 2007

2028569

2006

90th perc 152 mins

88%

97%

100%

Jan-Dec 2008

2073443

2007

80.9%