Beijing's strategy has helped Hong Kong's economy to rebound, but recovery has not translated into support for Tung. In November, pro-government pols lost big in local elections. On Jan. 1, thousands again marched for democracy. Now, democrats have their eyes on September's legislative elections, in which they could win a majority. Then, they could push Tung to meet their demand for a direct election of the chief executive in 2007. Hong Kong's constitution has vague statements about having a more democratic system by then, but it leaves out the crucial specifics. "There will be more demonstrations," says pro-democracy lawmaker Lee Cheuk-yan. "Even if the Chinese government opposes [democracy], it makes no difference to us. We will fight for it."
Tung is still playing for time: In his annual policy address, on Jan. 7, he disappointed democrats when he appointed several deputies to consult with Beijing about political reform, but he said nothing about when he would consult the Hong Kong public about the 2007 question. "We definitely need to understand the full implications of these important issues, before making appropriate arrangements," Tung said. Even though Tung doesn't want to give in to the democrats again, he's in a bind: Taiwanese President Chen Shui-bian, whom China's leaders loathe, is running for reelection in March on an anti-Beijing platform. A nasty face-off between Hong Kong demonstrators and the government would demonstrate to Taiwan's voters that Beijing will not tolerate democracy -- and thus help Chen.
Is there a way out of this impasse? Probably not in the short term. But don't be surprised if the Chinese start to show more flexibility. Hu, a dyed-in-the-wool party operative, is no closet democrat. But he has already shown more pragmatism than his predecessors -- and may do so again. That may include giving Hong Kongers a measured dose of democracy. Indeed, some Chinese officials are now talking privately about compromises. Surprised by the depth of anti-Tung feeling, Beijing has been sending more of its own people to Hong Kong. While Beijing hard-liners oppose concessions to the democrats, some Chinese emissaries are more accommodating, says Allen Lee, former chairman of the pro-business Liberal Party and now a Hong Kong representative to the National People's Congress. "They are looking for a way out of this jam," says Lee, who says he has met with the Chinese emissaries. "Some kind of reform is coming." One idea: Allow a direct election for the chief executive in 2007, but only after a committee of pro-government Hong Kong people vets the candidates.
Some of the city's elite still believe these experiments won't happen. Democrats "think that by putting enough people on the street, they can get what they want," says Shiu Sin-por, executive director of the One Country Two Systems Research Institute, a pro-government think tank. "Beijing will be very conservative." That's certainly the instinct of many in the Chinese leadership. But with Hong Kong more politicized than ever, stiff-arming the democrats may not be a viable strategy. By Bruce Einhorn