Hong Kong Picks New Leader as Wealth Gap Fuels Public Discontent

A 1,193-member committee of billionaires, including Hong Kong’s richest man Li Ka-shing, lawmakers and academics cast their votes for the three candidates starting at 9 a.m. at the Hong Kong Convention and Exhibition Center. Leung Chun-ying, the favorite in opinion polls, and Henry Tang, a former chief secretary, secured the most nominations.

The next chief executive will be the last to be chosen by a narrow group in the former British colony, with China having pledged to introduce universal suffrage in 2017. The winner will inherit a city with the biggest wealth gap in Asia, spawned by an influx of money from mainland China that has helped make Hong Kong the world’s most expensive place to buy a home.

“Whoever becomes the next chief executive will have a challenging task of addressing the wealth gap,” said William Fung, executive deputy chairman of retailer Li & Fung Ltd. (494) “The next leader will need to address the housing problem, the affordability issues as well as bringing sustainable economic growth to Hong Kong.”

Since the handover in 1997, median monthly household income has remained unchanged at HK$20,000 ($2,576), while the economy grew 62 percent. London-based Savills Plc (SVS) said the price of an apartment in Hong Kong is almost two times higher than in London, which placed second on the property broker’s list of most expensive places to buy a home.

Protesters in Street

The election pits Tang, the son of a textile tycoon, against Leung, the son of a policeman. Democratic Party lawmaker Albert Ho is also running. Incumbent Chief Executive Donald Tsang will step down at the end of June.

“The whole election is a joke,” said Avery Ng, vice chairman of the League of Social Democrats, which plans to organize a protest of more than 1,000 outside the polling venue. “This is a small-circle election and committee members should not attend it.”

Public discontent with the government has grown. Thousands took to the streets March 3 to demand that Tsang quit after it emerged he had taken trips on yachts and planes of his tycoon friends. Former Chief Executive Tung Chee-hwa resigned after half a million people protested in 2003 against a proposed anti- subversion law they feared would curtail personal freedoms.

Tang’s Scandals

Tang, 59, has seen his popularity plunge after admitting to an affair and knowledge of a basement built illegally by his wife. Two-thirds of the respondents in a Feb. 23 poll published by the South China Morning Post said Tang should quit the race.

Leung hasn’t been free of scandal either. The city’s Legislative Council is investigating claims he had a conflict of interest in helping select an arts hub in 2002. Leung has denied any wrongdoing.

Leung is backed by 39 percent of respondents in a poll of 1,026 conducted by the Hong Kong University between March 16 and March 19. Tang, who was nominated by some of the city’s richest men, had 22 percent support in the poll.

Leung had won pledges of support from at least 563 members of the election committee as of March 23, the South China Morning Post reported yesterday, citing its own count.

“The impact of this election has been negative so far,” said Shiu Lik-King, a public policy lecturer at the Chinese University of Hong Kong. “The biggest concern is that conflicts in the society have grown even sharper.”

Public Housing

Tang said March 8 he will expand public housing by a further 60 percent in five years, spend HK$6 billion more annually on schools, and create 100,000 jobs for the middle class if he wins.

Leung has pledged to build more public housing, increase land supply and provide tax-breaks to help residents buy their own homes. He also promised to speed up public projects like expanding the city railway system and encourage the use of electric and hybrid cars.

“People think that Leung would probably push for more land sales, and put more restrictions on mainland buyers in the Hong Kong property market,” said Alex Wong, an asset-management director at Ample Capital Ltd., in Hong Kong.

Leung may have won the backing of China. Officials at Beijing’s Liaison Office in Hong Kong have been calling committee members to encourage them to vote for Leung, the city’s public radio station RTHK reported March 20, citing James Tien, the honorary chairman of the Liberal Party. Liu Yandong, a member of China’s Politburo, has met Hong Kong businessmen to persuade them to vote for Leung, the local Sing Tao Daily reported the same day, without citing anyone.

Advance Democracy

“We have to have the confidence that Hong Kong people can manage Hong Kong well,” Chinese Premier Wen Jiabao said at a March 14 press conference. “Hong Kong must continue to work hard, to develop the economy, improve people’s lives, advance democracy and maintain social harmony.”

A winning candidate needs to get more than 600 votes, according to the Registration and Electoral Office. Should three rounds of voting fail to produce a winner, a new election date would be set for May 6, and candidates would need to go through the nomination again, according to spokesman Joseph Wong.

“We have a bunch of social issues we need to address, and we need a strong government,” said Bernard Chan, president of Hong Kong-based Asia Financial Holdings Ltd. (662) and a member of the election committee. “We don’t have a lot of time.”

 

 

(Bloombergnews)


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