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Could Tsang v Lam shape up as elites v the people in Hong Kong chief executive battle?

John Tsang is seen as the friend of big business who takes a conservative view on spending public money, while Carrie Lam wants to tackle the wealth gap and bridge the social divide

PUBLISHED : Monday, 16 January, 2017, 11:51pm
UPDATED : Tuesday, 17 January, 2017, 10:53am

Carrie Lam Cheng Yuet-ngor and John Tsang Chun-wah may share a similar career trajectory of having spent decades in government service, but they are hardly cut from the same ideological cloth.

If Tsang throws his hat into the ring in the coming days and runs for chief executive, their approaches to social issues, a fast emerging difference between the two, could be the defining feature of their election battle.

Tsang, who joined the government in 1982, is a firmer believer in “big market, small government” and favours minimal government intervention.

But Lam, who joined the administration two years earlier after graduating from the University of Hong Kong, has sought to highlight the need to support the disadvantaged and to promote balanced development, given the city’s widening income inequality and hefty fiscal surplus.

The difference in their governing philosophy has given rise to a perception that Tsang is backed by the city’s elites and favours the status quo, while Lam is supported by people who favour a proactive approach to tackling social ills. While they may naturally appeal to such constituencies, academics warn against portraying the pair as representing exclusively the interests of opposing social classes or blocs. The candidates themselves are going to some lengths not to be painted into one corner, with Lam stressing she is not a socialist and Tsang uploading pictures of himself bonding with ordinary people.

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As financial secretary, Tsang managed large budget surpluses but was widely viewed as too conservative in how public money was spent. He had argued that the bigger the fiscal reserves the government amassed, the better.

In 2013 Tsang appointed economic analysts and academics to study the impact of the ageing population on public finances, which are subject to land revenue fluctuations and rely increasingly on salaries and profits tax.

The report by the Long Term Fiscal Planning Working Group, released in March 2014, warned Hong Kong could be as heavily indebted as Greece – facing a structural deficit of HK$1.54 trillion by 2041 – if spending grew at the current pace and nothing was done to mitigate the impact of an ageing population.

At a closed-door seminar attended by senior government officials at the Science Park last Thursday, Lam spoke in stark contrast of the need to support the disadvantaged and to promote balanced development and an inclusive society.

In her swan-song speech as chief secretary, she said the ageing population should not be seen as a problem because “nowadays many elderly people are better educated and they may not rely on welfare payments in future”.

At a closed-door dinner on December 13, Lam, formerly chairwoman of the Commission on Poverty, described the fiscal planning report as unfair to the elderly.

Lam raised eyebrows last year by acknowledging three “mountains” or contentious issues the government aimed to conquer.

She identified these as the controversial management of public housing malls by The Link Reit, repeated MTR fare increases and the offsetting mechanism of the Mandatory Provident Fund, which allows bosses to settle severance or long-service payments through worker contributions.

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The Link, which took over government-owned malls and markets in 2005, has been accused of adopting a business practice that pushes up rents and drives out small concerns.

Liberal Party honorary chairman James Tien Pei-chun personally endorsed Tsang and said he was the business sector’s favourite for chief executive.

Professor Lau Siu-kai, vice-chairman of the semi-official Chinese Association of Hong Kong and Macau Studies, said it was natural that businesspeople and the wealthy were more receptive to Tsang’s pro-market approach.

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But Lam was quick to make clear during the Science Park seminar that “I’m not a socialist” and that Hong Kong should not abandon capitalism.

Announcing her bid for chief executive on Thursday, she said: “I support the free-market economy but I agree there is a need to narrow the wealth gap and bridge the social divide. This is different from championing socialism.”

Tik Chi-yuen, convenor of the political group Third Side, appreciated Lam’s determination to get things done and help the underprivileged by going around bureaucratic rules. “John Tsang believes in ‘the less, the better’ and seldom took bold initiatives,” Tik said.

He suggested a substantial number of businesspeople favoured Tsang because they were unhappy with Chief Executive Leung Chun-ying’s interventionist approach and measures such as imposing a heavy stamp duty to cool the property market.

But Dr Law Chi-kwong, who worked with Lam on the Commission on Poverty, pointed out that she was well connected to the business community and had worked with some second-generation tycoons.

Law said Lam also worked closely with Hopewell Holdings and Sino Land on the handling of hawkers next to The Avenue, a property project in Wan Chai.

Tian Feilong, an associate professor at Beihang University’s law school in Beijing, said Tsang’s governing philosophy was closer to that of the business sector while Lam’s proactive approach was more in line with the need for ­social development, such as ­narrowing the wealth gap.

“But their differences are only about concrete policies, and labels like who represents business interests do not help rational analysis on who is the better candidate for the top job,” Tian said.

While Tsang’s more conservative stance may sit well with the entrenched elite, Lam’s attempts to reach out to be more inclusive suggests an acknowledgement that change must take place in the social compact.

Tian said this approach sat better with Beijing, which trusted Lam more. She also had the advantage of close interaction with the central government on issues like political reform, he added.

“The central government’s expectation of a chief executive is higher than for a minister. It expects the chief executive to have the capability of handling complicated situations in Hong Kong and its relationship with the mainland and the international community,” Tian said.

Additional reporting by Raymond Cheng