Tectonic shift in Hong Kong’s power structure

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There is a fundamental shift in power relations happening and the woes of Sir Donald Tsang and Mr Li Ka Shing tell the story.

Forget about the Occupy Central movement and its aftermath; the media-bashing of tycoon Li Ka-shing and the prosecution of former chief executive Donald Tsang Yam-kuen have caused much bigger shocks in the political and business landscape of Hong Kong and the mainland.

There is no evidence so far that suggest the articles carried in the official Chinese media about Li’s alleged divestment and the charges of misconduct against Tsang are directly related.

That Li, Asia’s richest man, and Tsang, the former Number One in the city, have stepped into trouble, raises questions about the growing complexities in the political and business environment across the border.

Sir Donald in the dock

First, the Tsang case. After more than 40 months of investigation, the Government has formally laid charges against Tsang in Eastern Court on Monday. He faced two counts of misconduct of in public office relating to the rental of a three-storey apartment in Shenzhen.

In a statement issued on Monday, Tsang said he had a “clear conscience” and “every confidence the court will exonerate” him. After he spoke, his wife, Selina Tsang Pou Siu-mei read from a written statement to defend Tsang.

She said:”[Donald] is, beyond a shadow of a doubt, a man of honesty and integrity,” she said. “We longed for peace and tranquility in retirement, away from politics. Instead, we now find ourselves dragged into a whirlpool.”

Her remarks are no doubt also the words from the bottom of the heart of her husband, both lamenting their plight of being “dragged into” the troubled political waters.

The Tsang couple might have preferred to be less explicit in their choice of words. Both the Secretary for Justice, Rimsky Yuen Kwok-keung, and Chief Executive Leung Chun-ying went out of their wa to make it abundantly clear there were neither political considerations nor political persecution involved.

The decision to take Tsang to court came days after Li Ka-shing has become the subject of criticism and ridicule in mainland Chinese media and web chat room in the past few weeks.

Li bashing

The blitz of Li-bashing publicity was kicked off last month when an article on WeChat said Li had “genuinely defined” the term “evil capitalist” by sitting on his assets until land prices rose, then selling for huge profit.

It was followed by an article in the Liaowang (Outlook) Institute, a think tank under the official Xinhua news agency. In it, it accused Li of abandoning the country at a time when its growth is slowing.

Headlined “Let Li Ka-shing, go, the sky won’t collapse”, a commentary in the Securities Times argued many companies would lose confidence in doing business in the mainland if Li was forced to keep his assets there.

Joining the debate, the People’s Daily called on fellow citizens to “build a better country to make Li’s departure today become his regret tomorrow.”

Li hits back

In a rare, lengthy and strongly-worded statement issued last month, Li refuted the accusation against his divestment, and warned of “Cultural Revolution-style” attack, saying he felt ‘chilly’. In an attempt to moderate his rebuttal, Li said he believed the mainland media’s blast was “not representative of the progressive economic policies” of the central government.

Li’s high-profile retaliation has intrigued many in the political and business circles, just as they were puzzled by the seemingly orchestrated propaganda against the tycoon, who had been given the red-carpet treatment by former Chinese leaders – from Deng Xiaoping to Jiang Zemin, Hu Jintao and Xi Jinping.

A handful of those who spoke in support of Li include former chief secretary Henry Tang Ying-yen, a Chiuchow (Li is a native of Chowchow) business association and Lew Mong-hung, a businessman known for his sharp criticism against C Y Leung.

Surprised by the war of words and feeling unsure about what it was all about, more political and business players preferred keeping silent. Some, like Li, would also be chilled by the tirades against Li, wondering whether they would become the next target.

Apart from the reorganisation of his group using Cayman Islands-registered companies, Li raised eyebrows when he stood firm in support of Tang in the 2012 chief executive race even after Leung has become a sure-win long before the secret ballot vote.

Both his group’s development strategy and his support for Mr Tang have been seen as a departure from the central government’s policies in luring foreign investment to help the country’s economic restructuring and giving full backing to Leung’s governance,  respectively.

Triangulating Sir Donald in

Although for obvious reasons, Donald Tsang had refrained from taking side in the Leung-versus-Tang contest, it is widely understood he is closer to the Tang camp.

Indeed, Tsang has been heavily criticised for his pro-business (some would say pro-property tycoon) and anti-welfare policies. Leung’s supporters have blamed Tsang for his “do-nothing” approach in land and housing during his reign, claiming it led to skyrocket prices and a serious lag in supply.

It is difficult to ascertain the role of the Beijing leadership in the Li-bashing campaign and the prosecution against Tsang. But it is likely that both would not have happened if Beijing has been determined to stop it.

Taking the two cases together, they have symbolised the end of an era featuring pro-tycoons policy and civil servants-led leadership during the rule of Jiang Zemin and Hu Jintao.

If the communist authorities have “deified” Li Ka-shing during the pre-Xi era, they are now keen to “de-deify” him as the Global Times said in response to Li’s response.

Gone are the days when the city’s richest man might have probably been the most influential person in the government’s decisions on certain policies.

And in a sense, the conviction of former chief secretary Rafael Hui Si-yan for corruption and the prosecution of Tsang for misconduct would also have the effect of “de-deifying” civil servants.

With the old order of civil servants governing with the backing of major tycoons seems to be fading, a new era has begun with new movers and shakers surfacing in the political and business scene.