Bloomberg News

Hong Kong Protests to Underscore Leung’s Record-Low Appeal

June 28, 2013

Hong Kong Protests to Underscore Leung’s Record-Low Appeal

A protestor displays an effigy of Leung Chun-ying, Hong Kong's chief executive, outside the Cheung Kong Center during a Labor Day march in Hong Kong, China. Photographer: Jerome Favre/Bloomberg

Tens of thousands of demonstrators will march in Hong Kong on Monday, calling for greater democracy and action to narrow the wealth gap, as city leader Leung Chun-ying battles near record-low popularity.

The July 1 rally, to mark the anniversary of Hong Kong’s 1997 return to Chinese rule, will draw at least 50,000 people, said Jackie Hung, convenor at the Civil Human Rights Front, which is organizing the protest.

In his first year, Leung has defied opposition from developers to impose tough measures to rein in surging home prices and moved to improve the lot of the city’s poor. Still, his tenure has been marred by scandals involving Cabinet members and bickering over plans for broader democracy. The protest also comes a week after the Chinese territory made global headlines when fugitive American Edward Snowden was allowed to leave despite U.S. demands to arrest him.

“He might have brought home prices down, but people still can’t afford to buy apartments,” said Ma Ngok, a political scientist at the Chinese University of Hong Kong. “It seems like when it comes to issues on political reform or things that may upset China, he would have no stand or just toe the central government’s line.”

Support Rating

Leung’s support rating in mid-June was 46.2 on a scale of 0 to 100, according to a survey of 1,040 people conducted by the University of Hong Kong’s Public Opinion Program. That’s down from this year’s high of 52.2 in mid-January and just above his record low of 46 in late September after protests against government plans to introduce Chinese identity lessons in schools.

The government needs time to implement programs to address housing and other needs, Leung said today.

“Everyone should give the government, including the political team, the space and the time that is needed for us to deliver on the pledges that we made,” Leung told reporters after attending a luncheon in Hong Kong. “We are here to serve the entire community.”

Leung said no officials plan to resign. The government can increase supply for public and private housing, and the community should work together in reaching a consensus on land use, he said.

Latest Scandals

Former Chief Executive Tung Chee-hwa’s support rating sank to 35 in July 2003, days after half-a-million people took to the streets to protest against a planned anti-subversion law. Leung’s predecessor Donald Tsang had a rating of 38.5 a month before his term ended amid allegations he accepted favors from local tycoons.

Leung, who served as adviser to both Tung and Tsang, faces questions over the conduct of his officials, with three members of his Cabinet quitting or taking leave over alleged wrongdoing.

Former Secretary for Development Mak Chai-kwong was convicted by a court on June 24 for defrauding the government over housing allowances and is awaiting sentencing. In November, Franklin Lam, another member of Leung’s Executive Council, took a leave of absence after media reports that he sold two apartments before Leung imposed measures to curb home prices. Cabinet member Barry Cheung last month resigned from all public positions after the police began a probe of Hong Kong Mercantile Exchange Ltd., which he founded and headed.

Universal Suffrage

“The latest scandals have certainly tarnished the reputation of Hong Kong as being one of the cleanest cities in Asia,” Scott Lane, chief executive officer at the Red Flag Group, said in e-mailed comments. “A solid reputation on corruption is very difficult to build, but so easy to lose.”

Hong Kong, a former British colony, returned to China under a “one country-two systems” concept that enshrines its freedoms under the Basic Law for 50 years. The annual protest serves as an indicator of how the city’s 7.2 million people regard the leaders in Beijing. In 2003, more than 500,000 marched to demand Tung resign over plans to introduce anti-subversion laws.

As chief executive, Leung is also responsible for providing a blueprint for elections in 2017, when Hong Kong is due to pick its next leader by universal suffrage for the first time, based on a timeline set out by China. Leung and his two predecessors were chosen by a committee composed of the wealthy, lawmakers and professionals.

Snowden Leaves

Pro-democracy groups are pressing Leung to fulfill his promise to implement full democracy.

The Chinese government and Hong Kong people may not see “eye-to-eye” on the best candidate for the city’s leader, Leung said in a June interview with Bloomberg News.

Hong Kong’s decision to defy the U.S. over Snowden also raised concerns about Beijing’s influence. U.S. lawmakers expressed anger when Hong Kong didn’t act on a request to arrest Snowden, the former U.S. intelligence contractor facing espionage and fraud charges, before he boarded a flight for Russia.

Snowden left the city using “the usual and lawful channels” while the government was processing the U.S. arrest request, Leung said on June 24. The city must discuss issues related to foreign affairs with the Chinese government, he added. Hong Kong’s request for more information from U.S. authorities on Snowden was real, not a pretense to delay the process, Leung told reporters yesterday.

“I don’t think C.Y. could make the decision himself,” said Jean-Pierre Cabestan, professor of political science at the Hong Kong Baptist University. “It’s an extradition case which has to do with national security, and national security trumps any kind of legal autonomy enjoyed by Hong Kong.”

Home Prices

Leung has had some policy success.

Hong Kong’s home prices, the world’s highest according to Savills Plc (SVS), have fallen 3 percent from a historic high in March, while transactions have been near the lowest level since the global credit crisis in 2008. Since taking over, Leung has intensified efforts started by his predecessor with extra taxes on non-resident home buyers, a doubling of sales tax on transactions and repeated pledges to increase land supply.

Leung said in the June interview that his government is “delivering results” and has “made a very clear stance” on its housing policies. It won’t ease the curbs until there is a steady supply of new properties, he said.

Home prices have more than doubled since early 2009 on record-low mortgage rates, an influx of mainland Chinese buyers, and as Tsang kept new housing supply low during his term while the city emerged from a six-year property slump starting in 1998.

Public Discontent

“Housing remains the number-one issue in Hong Kong’s governance,” Raymond Yeung, economist at Australia and New Zealand Banking Group Ltd., said by telephone. “Public discontent remains high. Those who want to buy a home still can’t afford it.”

Leung also raised welfare spending by about a third in his budget unveiled in February, handing out allowances to more than 400,000 elderly residents and pumping $2 billion into a poverty alleviation fund in the budget.

“People would expect a new leader to bring some new policies,” said Chinese University’s Ma. “To a lot of people he’s done too little, and brought too much damage.”

To contact the reporters on this story: Simon Lee in Hong Kong at slee936@bloomberg.net; Kelvin Wong in Hong Kong at kwong40@bloomberg.net

To contact the editor responsible for this story: Bruce Grant at bruceg@bloomberg.net


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