The small, tight circle that runs Hong Kong

Philip Bowring says the revelations from Donald Tsang’s trial, at a time when Hong Kong is poised to elect a new leader, bring home why the city is stagnating – it has been in the grip of the same clique of rich and powerful figures for far too long

PUBLISHED : Saturday, 25 February, 2017, 10:01am
UPDATED : Saturday, 25 February, 2017, 8:03pm

Guilty or otherwise, it is hard not to have a pang of sympathy for former Hong Kong chief executive Donald Tsang Yam-kuen, and wonder how far occult politics played a role in his prosecution. The sums involved were minuscule compared with the implicit corruption in a system which sustains so many government-condoned monopolies and rent-seeking arrangements.

Take the crucial issue of land. Would we need reclamation or country park space if the government, not the Heung Yee Kuk, ruled the New Territories? Or if it would apply its compulsory purchase powers to some of the huge acreage held as land banks by the big developers, enough to build 600,000 homes? Or can we sincerely believe that the Independent Commission Against Corruption operates in a politically neutral manner when the chair of its crucial Operations Review Committee, which has veto power over every stage of an investigation, is Maria Tam Wai-chu, a fervent Beijing loyalist, and with deep roots in the taxi licence business. Most members are drawn from a small circle of businessmen and former officials.

We Connect” is chief executive contender Carrie Lam Cheng Yuet-ngor’s campaign slogan. So, let us see to whom she is best connected. She made that task easier by parading her top backers at her campaign launch. Now we can judge whether this list of the rich and powerful contains the sort of backers who will help her bring about the “new style of government” she promises, solve housing problems and offer a “new vision”.

One such name in the news for other reasons is the Li family, of the Bank of East Asia. Others have commented on the admission in court by the ICAC’s director of investigation that graft-fighters did not press to interview the bank’s chairman, David Li Kwok-po, said to be an intermediary in a large cash payment to Tsang, on the grounds that he would be uncooperative. Was the ICAC afraid to use its powers of investigation? Or did it have ulterior motives? Equally astonishing was the ICAC’s evidence in court that the weight of the bank’s administrative and legal infrastructure was brought to bear to obstruct the investigation. The issue went on for months, and must have involved top management. Statements by bank employees were reviewed by lawyers before they were allowed to sign them. Lawyers even amended staff statements.

Was the ICAC afraid to use its powers of investigation?

The bank has three executive directors, David Li and his two sons, Adrian Li Man-kiu and Brian Li Man-bun. The latter is one of the deputy directors of Lam’s campaign office. The deputy chairman of the bank is Arthur Li Kwok-cheung, an Executive Council member and chairman of the council of the University of Hong Kong. He, along with his brother and other luminaries such as Lam’s Council of Chairpersons member Ronald Arculli, were shareholders in Wave Media (which later changed its name to Digital Broadcasting Corporation), the company at the centre of the Tsang case. Former ICAC commissioner and secretary for security Ambrose Lee Siu-kwong was a director.

None of this suggests illegality but points to the very small circle of names which dominate Hong Kong government and local (not international) business. Lam’s list of chairpersons and advisers is a roll call of people who have been too powerful for too long. This assemblage of tycoons, former civil servants, Chinese People’s Political Consultative Conference members and many names which appear regularly on rubber-stamp advisory and government-controlled bodies, such as the Hong Kong Exchanges and Clearing, is remarkable.

The Heung Yee Kuk: how a village governing body became an empire of rural leaders

Worse still, the electoral system gives absurd weight to interest groups such as agriculture and fisheries (60 uncontested votes in the Election Committee) and the Heung Yee Kuk. No wonder that Lam’s 10 years as secretary for development and chief secretary saw so little progress on land and law enforcement in the New Territories.

This month, we learn that taxi fares are set to rise. But who believes that the increase will mostly go to the drivers, not the licence owners? The licence monopoly, and the crushing of Uber, means owners will, naturally, charge whatever drivers are prepared to pay. That drives down wages and increases owner profits. The latest price for an urban licence is about HK$6.7 million, an increase of some 6 per cent over the past 12 months, even before the fare increase.

The taxi trade is likely to win its fare-hike battle, as Hong Kong loses out again to vested interests

A lack of dynamism in Hong Kong, a city now lagging far behind its peers in so many ways – not least in environmental, transport and competition issues – is directly attributable to the protection of existing interests and the government’s own role in sectors which should be competitive.

This column has repeatedly criticised John Tsang Chun-wah’s budgets. His successor, Paul Chan Mo-po, has produced a similar one, with salaries tax cuts mainly helping the top 25 per cent. Chan worried about the narrow tax base but narrowed it even further with direct tax cuts and rebates of HK$31 billion. He reissued platitudes about innovation and “ re-industrialisation” but there was not a hint of radical thinking.

Hong Kong is stuck in a deep rut, bordered on one side by the list represented by Lam’s backers, on the other by an overpowerful, underchallenged officialdom which resents criticism. Neither the Tsang trial proceedings nor police attitudes to the judiciary provides comfort for the future.

Philip Bowring is a Hong Kong-based journalist and commentator