Beijing refused to step in during 1998 Hong Kong financial crisis, former city chief reveals

Former Hong Kong chief executive Tung Chee-hwa reveals Beijing officials did not want to breach ‘one country, two systems’

PUBLISHED : Friday, 07 July, 2017, 10:06pm
UPDATED : Saturday, 08 July, 2017, 1:57am

Beijing declined the Hong Kong government’s request to have experts intervene in the city’s financial crisis after the 1997 handover in order not to breach “one country, two systems”, the city’s leader at the time has revealed.

Tung Chee-hwa, who made the appeal for intervention to Beijing in 1998, shared the story from his tenure as the first post-handover chief executive on Friday as he spoke about his experience with the political model at a conference held by the Asian Academy of International Law.

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That year, Hong Kong was ­embroiled in the Asian financial crisis. The city’s exchange rate, linked to the US dollar, and the stock market were threatened by speculation by international ­investors. The government was making plans for a massive intervention to beat back the speculators.

“It was a very difficult decision to make. I telephoned the deputy premier Mr Qian Qichen,” Tung recalled. “I said ... can you send a couple of guys down here, let’s walk through this together and make sure every thought has been vetted very carefully. He said ‘okay, let me think about it for two days’.”

Tung said Qian called him back about two days later: “He said, ‘Mr Tung, we really don’t know enough about you, about Hong Kong. If I send people down to see you they may give you all sorts of wrong advice. You’ll regret it, I’ll regret it. I don’t think it’s a very good idea. We trust you and your colleagues. You should go ahead. Don’t bother with us’.”

Qian also reminded Tung that he should not be inviting Beijing to interfere in the city’s domestic matters. Tung said: “[Qian] added: ‘You know under “one country, two systems”, we are not supposed to send people over. Don’t you remember that?’”

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In the end, the Hong Kong government used its reserves in 1998 to defend against speculators.

Summing up, Tung said his administration had been “left alone” unless if it involved the “red line” – issues regarding sovereignty and territorial integrity.

The phrase “red line” was used by President Xi Jinping when he inaugurated Hong Kong’s new chief executive Carrie Lam Cheng Yuet-ngor on July 1, warning the city not to cross the “red line” of undermining Chinese sovereignty and become a base of infiltration and sabotage activities against the mainland.

Tung stepped down in 2005, two years after his attempt to legislate on a national security law prompted 500,000 to take to the streets. He was forced to withdraw the bill.

While Tung tried to show Beijing’s restraint in intervening in Hong Kong’s affairs, the situation changed after the huge protest against the national security bill in 2003, veteran China watcher Johnny Lau Yui-siu said.

“What Tung said did not mean Beijing did not interfere in Hong Kong at all – from day one national security agents had been sent here,” he said.

Separately, the Foreign Ministry signed an agreement with the academy on Friday to co-organise research and training programmes for legal officials in Asian and African countries.