Written remarks delivered to the Hong Kong University School of Law/National Democratic Institute for International Affairs Conference 21 April 2012: What is happening to our political system?
Implications of Chief Executive election for, and implications of the upcoming Legco election
Michael E. DeGolyer
I Implications of 2012 Chief Executive election on 2012 Legco election
1. Obviously the Legco election will be taking place within a time period of heightened attention to the new Chief Executive and his actions. Initiatives by the new Chief Executive will likely have an unusually large effect on these elections.
2. The incoming Chief Executive has already announced actions with impact on the elections:
A. Housing moves he supports (increased HOS, increased public housing, sandwich class support) are unlikely to have effect by September, but could if Leung simply bans mainland buyers of Hong Kong property, a tactic he has said he favors. This could have big negative impact on prices, however and with mainland interests, and thus further alienate tycoons, wealthy, and some-pro Beijing groups who may begin attacking Leung for “imperious” and ill-advised haste in making changes. Public may be swayed, or may feel these opposing groups are defending their business interests versus Hong Kong interests. Leung can certainly argue that he is favoring the grassroots and wants to address the wealth gap and government-business collusion. Even the beginnings of action on housing could have effect of lowering criticism of Leung, and undercut criticisms of pan-democrats.
B. Ban on mainland mothers giving birth in Hong Kong, has big effects:
a. Giving the announcement the way he gave it just strengthens perceptions of him as imperious and arrogant, and dismissive of possible violations of law and ignorant of government procedures. This immediately strengthens widespread suspicions of Leung and strengthens pan-democrats and Liberal Party who are skeptical of Leung. Arguments that Leung needs watchdogs in Legco ready to check his impulses gain weight.
b. However, if Leung proceeds by a move to amend the BL, that would strengthen his assertions that he supports rule of law and will respect the BL. That amendment would very likely pass and the debate about it would be healthy for Hong Kong to have. Leung’s “reasonableness” and respect toward the BL would put pan-democrats on the off-foot, and raises danger that the radical element of People’s Power and LSD anti-Leung excesses in statements and demonstrations are deemed by many in the public as “unreasonable” and opposition for the sake of opposition. Any democrats not backing People’s Power and LSD would be accused of being compromisers and unworthy of pro-democracy voter support—effect would be a repeat of District Council election, with pan-democrats in danger of losing their veto over constitutional amendments.
c. If Leung proceeds by asking for reinterpretation from Standing Committee, that would be a bad move and stir up great controversy, not on what he wants done, but on how he is doing it--by getting the mainland to twist the clear wording of the law as already interpreted by the Court of Final Appeal. This would make People’s Power, LSD and Civic Party look like uncompromising guardians of Hong Kong’s autonomy—heroes to many. Pan-democrats as a whole would gain, but radicals probably most, leaving coming Legco in a quandary on next constitutional reforms as the uncompromising faction gains in numbers.
d. If he does it purely administratively, by instructing civil servants not to issue ID cards to such children, then he could be attacked for refusing to follow the law, and his adherence to rule of law and BL would be questioned. Some democrats will support this action, others oppose and the pro-democracy NGOs and even Catholic Church may have strongly divided views if this action hits families with one parent having Hong Kong residency, or divides families who gained Hong Kong residency after they had their baby here. Simply saying babies born of Mainland China mothers whatever the circumstances will be banned certainly fans flames of Hong Kong-Mainland divisions. More than likely a pro-democracy lawyer would file a case of a mainland mother’s child being denied an ID card, and DAB/FTU and pro-government groups would have a chance to remind voters Civic Party supported maids getting Right of Abode, despite the Civic Party’s protests that a member lawyer and the party are not one and the same. Alan Leong has already moved to pre-empt this tactic as has Lee Wing Tat of Democrats by supporting administrative action to ban mainland mothers giving birth in Hong Kong. But likelihood is this ban would cause some distress if not splits in pan-democratic parties, and an associated lawyer would become associated with a legal challenge, unless party favoring lawyers deliberately act to stay away from defending mainland complainants. If a Civic Party or Democratic Party associated lawyer takes the case, this would lead to them being badly mauled at polls. In whatever case, pan-democrats would have their protestations over human rights mocked as being selective at best, hypocritical at worst, since views are clearly divided on this issue already.
e. If Leung does it by administrative measures at the border, for example, checking for pregnant women and refusing them entry within so many days of their expected delivery, that would be legal (as I understand it now), maybe controversial, maybe not. He can forbid public funded hospitals to provide for mainland maternity cases--he could, indeed, start a practice of hauling them in ambulances to the border and handing them over to Shenzhen authorities when they go into labour if it’s Mainland Chinese women who crossed in their 4th month of pregnancy before visibility and who stayed until due date. That would soon end most of the abuse. And if a pan-democratic lawyer took a case to challenge this procedure, see point d above. If in one such case the baby and/or mother died, Leung and all who supported this procedure will reap a firestorm of criticism, particularly if that woman’s husband held Hong Kong right of abode.
f. Leung could also push for laws against the private hospitals marketing a Hong Kong ID as part of their packages for mainland mothers--in effect, their making private profit off a public good that is not theirs to grant, in a sense, offering a bribe with something they do not own and do not have the authority to give, and hence, prosecutable fraud. This method might even get him accolades for strengthening rule of law AND cracking down on "corruption and collusion". Radical pan-democrats would have a really tough time criticizing this. Their charges of corruption and collusion would bounce off Leung’s and pro-government candidate’s arguments that the previous governments, run by civil servants and tycoons, was responsible for collusion and corruption, and that pan-democrats are opposing someone who is a Hong Kong born, Hong Kong trained, professional from the working class and lower civil servants (Leung’s dad a cop guarding the Governor’s gates). Leung supports can charge Civic Party with disdain of anyone not educated overseas.
C. Adjustment of MTR fares
This could be a popular move given the wide impact of decisions and criticisms from all sides about the procedures involved in setting fare increases.
D. Waste incinerator on Shek Kwu Chau
This is only the first of many incinerators, and most people do not realize that yet. So “findings” from surveys that show support for the first incinerator should be taken with a large dose of salt. Public support for incinerators seems to be fully tied to exactly where they are built. The full details of incinerator plans, number and placement, could and likely would swing public support into strong public opposition. So Leung’s intent to reexamine the policy and incorporate it into a much more comprehensive approach to waste management is both smart and necessary. However, depending on how he handles the issue, and whether he ties waste management with extremely wasteful land redevelopment policies that generate large volumes of construction waste, the issue could be very explosive since everyone in Hong Kong generates waste.
3. However, on all these issues Leung’s room for maneuver is particularly large. He is also obviously in a particularly great hurry to challenge and change Tsang’s policies, almost across the board. Leung owes the Li Ka-shing/Liberal Party faction nothing since they opposed him. This is first time these establishment groups are on the outside looking in. Further, Donald Tsang has had a completely outsize impact on Hong Kong’s economy for a very long time. He became Director General of Trade and the Chief Trade Negotiator for Hong Kong in 1991, followed by being Secretary of the Treasury in 1993, Financial Secretary in 1995, CSA in 2001 and Chief Executive 2005-2012. Thus he has had an inordinately deep impact on Hong Kong’s economic functioning for over 20 years, a full generation.
During this time, as Leung notes in his platform, Singapore, with a smaller population, passed Hong Kong in overall GDP. Hong Kong will, by 2015 he claims, drop to number 7 in size of its economy among Chinese cities, behind such as Shanghai, Beijing, Guangzhou, Shenzhen and so on. And, he says, “In 1997 the size of the Hong Kong economy was 2.1% of that of the USA. In 2010 it was only 1.5%.” Leung’s impatience to get on with changes he considers long overdue is often mistaken for arrogance and imperiousness. To get a flavor of his impatience and what he wants to address first and urgently, one of the best sources is in the Hong Kong Journal, January 2010:
“Much energy has been spent – and probably wasted – in the past year on how Hong Kong is threatened by Shanghai as a financial centre. At various times in the past two decades, analysts have claimed that Hong Kong is under threat from Singapore or Shenzhen or some other Asian city. Fortune magazine may have been the bluntest in 1994 with its “Death of Hong Kong” cover story, but it has not been alone among international publications in forecasting Hong Kong’s demise. Those analyses painting a rosy picture for China’s economic rise have tended to claim that Hong Kong will be progressively marginalized to become “just another Chinese city”. Those painting a darker future for China have argued that Hong Kong would inevitably be sucked in. Either way, Hong Kong is seen as doomed.
Needless to say, I have little time for such analyses, which tend to oversimplify and misdepict the likely future roles of Shanghai, Shenzhen or Singapore about as much as they do Hong Kong. This is not to say that Hong Kong faces no competitive challenges, or indeed to say that Hong Kong does not have to be prepared for them. On the contrary, it faces many and some of them are serious. But these challenges do not come from other cities in the region. They come from within Hong Kong itself. Solve these, and there is no centre in Asia that will usurp Hong Kong’s potential as Asia’s “world city” Fail to solve them, and Hong Kong is indeed likely to become “just another Chinese city”. The fate of Hong Kong’s future lies in its own hands. Our challenge is to identify and focus on our core problems and tackle them, and on our competitive advantages, and to exploit fully their potential.
He discusses events and surprises such as the Asian Currency Crisis and SARS, saying that the impact of these and other events was that:
… Upward mobility came to a juddering halt. After a decade in which a booming economy had brought fast rising living standards – and where the policy of localization combined with massive emigration to give promotion opportunities to huge numbers of local people – the economic environment turned horribly negative. Many lost their jobs and, lacking any unemployment safety net, had to return to the workforce at lower salaries. For those with their own homes, the collapse of house prices compromised their only store of wealth. The immigration of low-skilled workers from the mainland has also affected the low-income groups. Data on salary developments show that a million people—about 30% of Hong Kong’s workforce—earned less in 2006 than they did in 1996. In the same decade, GDP per capita increased by 34%. Restaurant workers today earn 4% less than they did 17 years ago. Workers in fast food outlets earn 19% less. Those driving container lorries earn 30% less.
Through the 1990s, the widespread sense of upward mobility and improving living standards created a highly positive social environment. But today, with upward mobility largely gone, or at least not as obvious compared to the past, the grim reality of a generally poor quality of life has hit home hard among Hong Kong families. In spite of international perceptions of an opulent society (on a PPP basis, Hong Kong is among the five richest societies in the world) the reality is that half of Hong Kong’s working population earn less than US$1,300 a month, with 5% earning less than US$410.”
I think we should take him at his word that he wants action, both quickly and across the board, on policy changes that will begin to address what he sees as legitimate sources of discontent, and clear indicators of mis-management. If democrats join in support of his populist moves, their differences with Leung’s supporters such as the FTU and DAB will be blurred. If they oppose them, they will risk being painted as barriers to social improvements and policy changes many voters want, many very desperately, to see. Since Leung does not owe most developers anything in terms of support for his election, he will have much less compunction in damaging the interests he sees standing in the way of progress.
In sum, if C.Y. Leung can “trap” the pan-democrats with populist moves that force them to compromise or defend human rights in awkward circumstances, he can turn the pan-democrats against themselves. Leung could fan popular demands for actions many or most democrats find objectionable. If on the other hand pan-democrats can provoke a confrontation with police and blame Leung for it, or if Leung takes actions deemed arrogant and/or against the rule of law and Hong Kong’s fundamental values and interests, pan-democrats could gain a veto with a majority both strong enough, and dominated by radicals enough, to defeat any reform bill that does not meet their demands. (Abolish all FCs in 2016? Abolish any nominating committee in 2017? Abolish Two House voting rule in 2016?) But this is also dangerous for People’s Power and LSD/Civic Party because if they are seen as having provoked the police (rather than the police provoke them) or if a police officer is seriously injured in a confrontation, then public sympathy will swing toward pro-government groups.
This will likely be an election campaign in which the actions of the new Chief Executive loom particularly large, and thus we will have to monitor his actions and the reaction of the community and the candidates and parties most closely. But it is very likely that Leung will not be able to be accused of inaction. Indeed, if he achieves momentum and makes a strong case for needful reforms and actions in many areas, then arguments that pan-democrats, Developer Hegemonists in the Functional Constituencies and Liberal Party candidates stand in the way of his program of change could push support toward those who Leung could say are “progressive” or “reformist” candidates. It will be very important for pan-democrats to widen their platforms to address many issues that, so far, they have much less agreement upon than full, free, and fair elections.
II Implications of the 2012 Legco election
Depending in large part on events in part one above, the effects of the election could be as follows.
1. The unavoidable issue: Constitutional Reform
Besides all the social and economic policies Leung wants to change and to push, he faces one issue he cannot postpone even if wanted to: constitutional reform. With Beijing pledged to accept direct election of the Chief Executive in 2017 he must act to prepare the way. Any delay in proposing a package for consultation, and any part of that proposed package that is seen as an insincere attempt at reform or as a deliberate move to sabotage direct elections in 2017 will trigger strong reactions among Hong Kong people. Since he may be expected to run again in 2017, he must be particularly careful to avoid being seen as acting in a manner which insures his re-election by some sort of rigged means.
Also, since more than likely any reformed nominating committee would involve District Councils and Legco members, Leung will need to reform those bodies before their respective elections in 2016 (Legco) and 2015 (District Councils). Since the civil service (at least under Stephen Lam’s direction) insisted it needed a year to prepare for reformed elections, and since previous consultations proved Hong Kong people wanted ample time to consider and respond to proposals, and since the Standing Committee will also no doubt want ample time to consider the issue, this means Leung can only wait to end of 2013 or early 2014 at the latest to put forward proposals for consultation. He will likely emphasize populist moves first and in order to influence the Legco elections, then, quickly, while the public is supportive and after it has come to appreciate why he is in a hurry (see article and manifesto cited above), he would be very smart to present a proposal and frame it as the means to move Hong Kong forward faster and more efficiently toward a democratic system that works to advance everyone’s interests.
During the Legco election campaign period he will very likely say the first priority is to fix Hong Kong’s long simmering economic and social ills, and that democrats who demand details on direct elections now are both putting the cart before the horse and doing their usual carping and delaying tactics just to gain media attention. If he enacts administrative changes that do not need Legco approval, and those are populist, like the mainland mothers ban, then his arguments and, no doubt, echoing arguments from pro-government candidates will gain traction. But he is vulnerable to charges that if he is so willing to act so quickly on other things, then his delay or avoidance in making a commitment to a timeframe or details on democratization reveals his bad faith or bad intents. Of course, if he came out during the Legco campaign with a call to start consultations on constitutional reforms right after the elections, then it would be hard for pan-democrats to attack him.
The key issue in the election for democrats, then, is to retain if not enhance their ability to force the Chief Executive to negotiate with them. The acceptance by the Hong Kong and central government of the Democratic Party’s reform proposals in 2010 broke the veto bloc of pan-democrats, and the follow-on suicidal attacks on DP members by People’s Power and other radical groups has left the pan-democratic camp in such disarray that it cannot even agree on cooperation to nominate candidates for the five new DC seats in Legco.
In the next round of constitutional reform, Legco will amount to 70 instead of 60 seats. Instead of 40 votes to pass reforms, Leung will need 47. Currently pan-democrats barely hold 23 seats in Legco, with strong coalition members limited to perhaps 22. They could hold every single one of these seats and still fall short of a veto, especially if the President of Legco votes in favor of reform (as Tsang Yok-sing said he would do in 2010). Thus, the pan-democrats face the challenge of holding every seat they now have, despite rumoured retirements of key and popular legislators like Audrey Eu, and despite deep divisions among pan-democrats such that they may compete head to head for the new District Council seats and, if they do, possibly lose all five. They must win at least one of the new Geographic Constituency seats and hold all they have now. If Leung successfully plays the populist card and the pan-democrats fall to infighting and suicidal competition and criticism of each other, then gaining a veto bloc of 24 solid pan-democratic seats will be in grave doubt.
2. Effects of new District Council super seats
Next, let us turn to the effects of the new District Council seats on post-election affairs. Let us take two cases, pan-democrats or pro-government parties winning or losing all 5 seats, and the case if they split 3-5. For this analysis, I assume that if the seats split 4-5 toward one side or the other it will be little different from winning or losing all five.
A. Winning all 5 or losing all 5
In this case if the pro-government parties lose all 5 seats to democrats they could be expected to be very skeptical of constitutional reforms that expand on this model of replacing the current FC seats with more DC seats. On the other hand, if the opposite occurs it will be the democrats who will oppose further reform that expands DC based FC seats.
B. Split 3-5 for or against
In this case opposition to reforms that replace the small franchise FC seats with more DC seats might be less opposed. In theory, a well balanced legislative chamber should represent geographic locales (neighborhoods, where people live), interests (what people do economically) and identities (how people define themselves, as party supporters, parents, religious people, sports people, disabled, minorities, etc). A Legco with seats elected geographically only will not represent Hong Kong very well. Nor will one with the so-called “functional” interest group seats as presently comprised. The only identity groups permitted now are some of the FC seats allowed to be held by foreign passport holders. There is a kind of “party list” system perhaps developing, but it overlaps with the geographic seats and will likely also do so in the new DC seats.
The directly elected, large constituency DC seats voting on the FC side when Legco divides into two “houses” to vote on private member bills or private amendments to bills will at some point pit these seats against the tiny constituency “rotten borough” FC seats dominated by big and often cartelized or monopolistic business interests. This will happen whichever group wins the most of these new seats. And that is when the population will suddenly wake up to the gross inequities in Legco that exist on the FC side and in relation to the GC side. When FC and GC seats elected by millions are stopped from taking very popular actions by the veto of seats where many ran unopposed and others were elected by fewer people than ride a single MTR train—and sometimes less than fit inside a single coach on that train—then people will begin to question how such a system could continue. The major effect of the DC seats will then become apparent, and the tenability of the traditional FC seats to resist abolition or expansion of franchise will be vastly reduced. If this happens with a bill that Leung pushes but these business interests oppose, then things will get very interesting indeed, particularly for the reforms he might then propose and which the public would then better understand the intent and effects of, if those reforms were to reduce or eliminate the ability of the traditional FCs to block populist legislation. If Leung could thread the needle enough on his proposed reforms to convince the public that the status quo was unacceptable and damaging to their interests, then it would be very difficult for the pan-democratic bloc, even if it had sufficient numbers to veto reforms, to hold together and block reforms.
3. Effects on pan-democrats if Leung succeeds in “trapping” them
If Leung pursues populist policies at the pace he might be expected to—during the election campaign—and if he succeeds in trapping pan-democrats into splitting over human rights or some other scenario as painted above, and if pan-democrats then do not win enough seats to veto constitutional reforms, then things are likely to become very hard for pan-democrats. Surely there will be recriminations and resignations among the democrats. There will pan-democratic acts of frustration from the felt futility that could very well cost pan-democrats popular support. And if the constitutional reforms once passed prove acceptable, if not popular, then 2016 could see a collapse of the pan-democrats as a functioning coalition of opposition.
4. Effects on governance if pan-democrats succeed in “trapping” Leung:
On the other hand, if pan-democrats can provoke a police crackdown or confrontation that puts them in public sympathy and which stokes fears of C.Y. Leung as a dictator, then Leung will have to try to shore up the pro-government coalition with concessions to their interests. The pan-democrats however have the delicate task of provoking without appearing to, or they could be painted as deliberately seeking to provoke the police, and thus acting insincerely or even recklessly. If the provocation gets out of hand, with injuries or even property damage to businesses or homes nearby, then public response could swing very strongly toward the government. But if the pan-democrats can trigger a response that leaves the police looking like over-reactors, it could result in several seats swinging to the pan-democrats, and likely the most radical of them. This increased Legco bloc of more radical members will slow if not reverse reforms Leung may want, and it could block constitutional reforms. On the other hand, if the radical block pushes too far and alienates the public and some of its allies, as it did in 2010 with the resignation and by-election referendum ploy, the ability and willingness of the pan-democrats to act as a bloc to force greater democratic reforms from Leung could be severely weakened, and a similar result as the 2010 reform vote could occur.
But with the pan-democrats forming a bloc on one side, and anti-Leung tycoon dominated FC seats and the Liberal Party on the other, Leung’s Legco support could be very narrow indeed. His own frustrations could then lead to the very kind of Legco-avoiding administrative actions that could be characterized as tantamount to dictatorship. There would be very little chance of constitutional reform before 2017, but both pan-democrats and anti-Leung tycoons would do their best to avoid blame for the reform failures. Leung could end up so unpopular and ineffective he becomes a one-term Chief Executive—handing over to another Chief Executive chosen by the current methods in 2017 to attempt the task of reform for direct elections for Chief Executive by 2022, and Legco for 2024. Thus those who oppose Leung could “defeat” him, but the cost would be yet another delay in democracy for Hong Kong.
 C.Y. Leung, “One Heart, One Vision: Manifesto for the Chief Executive Election 2012,” Printed by the C.Y. Leung Campaign Office, 2012. p. 24.
 Leung Chun-ying, “Does Hong Kong have the policy vision needed for the coming years?” Hong Kong Journal, Carnegie Endowment: January 1, 2010. Available at: http://www.hkjournal.org/archive/2010_spring/1.htm?zoom_highlight=cy+leung