(Adds comments from HSBC’s Peter Wong in seventh paragraph.)
Nov. 25 (Bloomberg) -- Hong Kong, with Asia’s widest rich- poor gap, will kick off the election for the city’s top job as former Chief Secretary Henry Tang and government adviser Leung Chun-ying are set to announce their candidacies.
Leung, 57, yesterday resigned as the Asia Pacific chairman of DTZ Holdings Plc, a London-listed property broker, to campaign for the position. Tang, 59, said he will announce his candidacy by the end of the month.
Hong Kong’s economy barely grew in the third quarter, and surging housing prices and inflation have spurred protests and led to a record-low approval rating for the government. Leung and Tang need to win votes from a 1,200-member election committee, some picked by China, that in March will select the replacement for outgoing Chief Executive Donald Tsang.
“The candidates are running neck-to-neck as both are acceptable to Beijing,” said Bernard Charnwut Chan, a Hong Kong delegate to China’s National People’s Congress. “It’s good that we don’t have a mandated person, and that engages the whole community to discuss who is a better leader to tackle the city’s conflicts, like home and health-care issues.”
Tens of thousands of demonstrators marched to protest surging home prices and inequality on July 1, the 14th anniversary of Hong Kong’s return to Chinese rule. Tsang, who will step down in June after running the city for seven years, last month said the jump in housing prices, up 70 percent since the start of 2009, has been the biggest source of public anger.
“The chaos in Europe and U.S. economies could hit Hong Kong hard, we need an experienced and capable helmsman to lead us,” Joseph Yam, who steered the city through the 1997-1998 Asian financial crisis as head of the Hong Kong Monetary Authority then, said yesterday in declaring for Tang.
Yam’s backing echoed that from Peter Wong, chief executive officer for Asia Pacific at HSBC Holdings Plc, who said Nov. 23 Hong Kong would benefit under Tang thanks to his “clear vision and strategies on finance and economy.”
Tang was previously financial secretary before becoming Hong Kong’s second-highest ranked official, a career path that mirrored Chief Executive Tsang. His father is Tang Hsiang Chien, who was ranked the 40th-richest person in Hong Kong in 2010 by Forbes Magazine.
The younger Tang’s best-known policy success was to abolish duties on wine in 2008, helping the city overtake London and New York as the world’s biggest wine auction market. As financial secretary in 2007, he handed out income tax rebates and property-rate waivers, earning him the nickname of “tong tong,” a term for sweets, from the local press.
“If he doesn’t make too many mistakes, Henry will have an edge because of his business background and experience with the civil servants,” said Joseph Cheng, a professor of politics at the City University of Hong Kong. “It’s popularity among the business tycoons that counts, rather than the popularity among the general public.”
In a televised speech on Sept. 28, when he resigned as chief secretary, Tang said he was stepping down to consider “how to improve our livelihood, and ensure that all sectors, particularly the underprivileged, would be able to truly share the fruits of our economic success.”
Hong Kong has the widest rich-poor gap in Asia, according to a report by the United Nations in 2008. Inflation, excluding government subsidies, was 6.4 percent in October, the highest level since records were kept in 2007. The economy has slowed, with just a 0.1 percent gain in the third quarter, after a contraction in the previous three months.
Leung, the son of a policeman who worked part-time at local restaurants when studying in the U.K, was one of the non- official members in the Executive Council, which advises the government on major policy issues.
As a 34-year-old, Leung became the head of the committee in 1988, responsible for drafting the Basic Law, the city’s de facto constitution adopted after the former British colony was returned to China.
Among his backers are Vincent Lo, chairman of Shanghai- based developer Shui On Land Ltd., who in August said the city needed a “courageous leader.” Hang Lung Properties Ltd. Chairman Ronnie Chan has also declared his support.
Leung has been vocal about housing policy, urging the government to resume a program to build subsidized homes that was halted in 2002. Home prices have surged on low mortgage rates and an influx of mainland Chinese buyers.
Leung enjoys more popular support, with an approval rating of 35 percent in the latest poll by the University of Hong Kong’s Public Opinion Programme, compared with Tang’s 10 percent.
The 1,200-member committee to be formed in December that will decide the next chief executive is elected from several sectors that represent business and political interests. Chinese Premier Wen Jiabao in March has said the city needs to resolve “deep-rooted conflicts,” underscoring concerns over social tension.
While the election isn’t a popular contest, the Beijing government will want to “ensure that the new chief executive will enjoy greater popular support and legitimacy to keep the city’s political and social stability,” said Peter T.Y. Cheung, associate professor in politics at the University of Hong Kong. “They will wait and consider the support these candidates can secure from different sectors in the community before deciding on their preference.”
--With assistance from Kelvin Wong in Hong Kong. Editors: Hwee Ann Tan, John Brinsley
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