Hong Kong election success for pro-democracy camp gives Beijing a headache when dealing with ‘kingmaker’ tycoons

Kinling Lo

Beijing will need to handle its relationship with Hong Kong’s tycoons more carefully after the landslide election victory by the opposition camp made them the accidental “kingmakers” in the choice of the next leader, analysts say.

The pro-democracy camp won 392 out of 452 seats in Sunday’s vote, taking control of 17 out of 18 district councils.

Although councillors’ powers are limited, the victory will give the bloc a bigger say in the selection process for the chief executive by handing them control of 117 seats on the 1,200-member committee that chooses the chief executive.

This shift in the balance of power will mean that Beijing will be more reliant on the major property developers and their business associates – at a time when Beijing has been trying to wean itself away from its over-reliance on the city’s tycoons.

“The impact on the chief executive election is very concerning,” Song SiO-chong, a professor at the Centre for Basic Laws of Hong Kong and Macau at Shenzhen University, said.

“The business sector’s take will become very important. Some business heavyweights have the ability to swing up to 100 votes from the financial and business sector, meaning their votes will be key to the election. When the time comes, Beijing will need to do a lot of coordination work,” Song said.

The city’s 3.8 million registered voters will have no direct say on the choice of the next chief executive, with the selection committee having been designed to provide Beijing’s preferred candidate with a strong support base.

A candidate needs to secure 150 nominations to run for office, and 601 votes to win in the committee, which consists of representatives from four main sectors – government bodies (including the district council bloc); industrial, commercial and financial services; the professions; and labour, social and religious groups.

The committee has been stacked with some of Hong Kong’s wealthiest tycoons, with the city’s two best-known developers – Li Ka-shing, who founded Cheung Kong, and Lee Shau-kee from Henderson Land – having sat on the committee since the first election in 1996, a year before the former British colony was handed back to China.

Last time around, 96 seats in the business sector were occupied by representatives of the developers – and 46 of these were taken up by employees or business associates of the six biggest groups – Sun Hung Kai Properties, CK Asset Holding, Henderson Land Development, New World Development, Wharf (Holdings) and Sino Land.

The success of the pro-democracy camp on Sunday gives them a majority in all parts of the city and means the 117 seats selected by district councillors, previously seen as “ironclad votes” for the pro-Beijing camp, are all likely to be occupied by pan-democrats next time round.

What were voters in Hong Kong district council elections saying?

In the 2017 chief executive vote Carrie Lam Cheng Yuet-ngor secured victory over former financial secretary John Tsang Chun-wah by winning 777 votes.

Analysts believe that most, if not all, district council votes went to Lam, making them one of the key factors that helped her reach the crucial 601-vote mark.

Voters queue to vote in the district council elections, but they will have no say in the choice of chief executive. Photo: EPA-EFE

Song pointed out: “If we do the maths from the 777 votes, minus the 117 votes the CE got from the district councillor sector, it would mean that Beijing’s next favoured candidate will only have a thin winning margin of 60 votes.”

In 2017, 325 votes went to the pro-democracy camp and adding a further 117 votes to this total will give the group control of around one-third of the electoral committee.

“While it’s unlikely that a non-Beijing appointed candidate will win the election despite the increased number of pro-democracy votes, Beijing will find it necessary to pick someone the business sectors can also support,” said Ivan Choy Chi-keung, a political scientist at Chinese University.

“Beijing still needs to manage the number of votes to legitimise the final winner.”

Scapegoats or scoundrels? Why ties between Beijing and Hong Kong’s property tycoons are unravelling amid protest crisis

But the increased reliance on the votes of the city’s business elite in the next chief executive election presents Beijing with a dilemma.

Previously it relied on them to help ensure Hong Kong’s stability, given their control of wide swathes of the city’s economy ranging from telecoms to public utilities and supermarkets, and Beijing was able to use Hong Kong’s financial and trade system to spur the mainland’s rapid economic development.

In return the tycoons relied on Beijing’s favour to give them access to the mainland market.

But in recent years Hong Kong has seen skyrocketing property prices and a growing shortage of affordable housing, which Beijing has singled out as key factors fuelling the unrest in the city.

Official media outlets such as Xinhua and People’s Daily have promoted this narrative – blaming the developers who profited from the situation and urging the city’s authorities to increase its housing stock by taking over land being hoarded by “vested interests”.

In September, Global Times , a tabloid affiliate of People’s Daily, singled out the lack of affordable housing as a “root cause” of the protests, which started in opposition to the now-withdrawn extradition bill but have since erupted into greater calls for democracy and investigation into police use of force.

What’s next for Hong Kong protesters after the high of opposition bloc’s crushing victory?

A few property developers have already tried to relieve the pressure on them by donating land for public housing, but Choy suggested Beijing’s need to win the businesses sector’s unified support in the chief executive vote could pave the way for a new offer.

“They will not hit out at the tycoons as they did [through state media] in recent months, and most importantly, pick a person that they will accept,” Choy said.

In the past tycoons have not always supported Beijing’s choice of chief executive. In 2012 Li Ka-shing did not support Beijing’s preferred candidate. He told the media that he had known his preferred candidate, former financial secretary Henry Tang Ying-nien, was not going to win but had still chosen to support him.

Tang, who was a popular candidate among the business sector, was supported by other prominent tycoons, including Lui Che-woo of K Wah Group and David Li Kwok-po, who chairs the Bank of East Asia.

In the last election in 2017, Tsang, the former financial secretary, was the most popular candidate with the public, according to opinion polls.

But Lam was widely seen as Beijing’s choice and only one leading real estate representative – Thomas Jefferson Wu, son of the founder of Hopewell Holdings founder, Gordon Wu Ying-shueng – nominated Tsang.

But Choy said Beijing would not allow business leaders to ally with the pro-democracy camp to give them “more bargaining chips”.

Lau Siu Kai, vice-chairman of semi-official think tank The Chinese Association of Hong Kong and Macau Studies, said Beijing was likely to tighten control over the chief executive election rather than trying to court the business community’s support.

He said it was likely to only allow one nominee from the pro-establishment camp and let the pro-democracy side pick its own candidate.

“This is the only way Beijing can minimise the possibility of not getting enough votes for its hand-picked candidate,” Lau said.

“In the past, Beijing would not feel threatened so it could accept some deviation from the pro-establishment camp … but now there cannot be any competition between pro-establishment candidates.”

“In the worst case scenario, Beijing will veto the choice by not appointing the elected chief,” Lau added.

Hong Kong election result a ‘wake-up call’ for China but will it listen?

In a directive issued at the end of the Communist Party’s policy meeting at the end of October, Beijing made it clear that it would “enhance the system and mechanism” used to select the chief executive and principal officers.

“Beijing will have made its contingency plans as plain as black and white before the next CE election,” Lau said, adding that it would also put forward a system for dismissing the city’s leader.

But Lau did not believe that the business sector would prove “critical” or become “kingmakers” as Beijing would find a consensus.

“At such a critical moment, would anyone in the business community actually risk bargaining with Beijing and threatening to stand on the opposite side? I don’t think so,” he said.

A political adviser to a leading Hong Kong property developer agreed with Lau.

“It is true that [Beijing] will have a thinner margin, making the votes of the business community carry more weight,” said the adviser, who asked not to be named.

“But that only means Beijing will need to make greater efforts to ‘persuade’ [them] and I think, in most cases, the business community can be and will be ‘persuaded’.”

Time for Beijing to ‘rethink Hong Kong script’ after pan-democrat landslide

However, not all business electors were convinced.

Pro-establishment lawmaker and tycoon Michael Tien Puk-sun, who was also an elector in the previous chief executive election, said he still hoped the committee would be given some leeway.

Michael Tien Puk-sun said he hoped the election committee would still have some influence over the choice of the next chief executive. Photo: May Tse

“This situation could be a good thing for Hong Kong, if the business sector has a greater say, because it means that there will be more discussions and consultation over a suitable candidate,” Tien said.

Tien said that he expected Beijing to put forward two candidates it found acceptable and let the electors choose.

But he said this plan would only work if the pan-democrats were willing to compromise.

“It’s not easy, but this is the practical way, since [the pan-democrats’] candidate would not win anyway,” he said.

“If the central government continues with its hardline approach, and the pan-democrats keep taking an obstructive stance … then there will be an impasse. Isn’t this exactly what has led Hong Kong to where we are today?”

More from South China Morning Post:

This article Hong Kong election success for pro-democracy camp gives Beijing a headache when dealing with ‘kingmaker’ tycoons first appeared on South China Morning Post

For the latest news from the South China Morning Post download our mobile app. Copyright 2019.