When Beijing regained control of Hong Kong more than two decades ago, the Chinese Communist Party entrusted the territory’s wealthiest tycoons with enormous influence over local politics.
This week, Chinese President Xi Jinping (習近平) took his most dramatic step yet to grab some of that power back.
Xi’s sweeping overhaul of Hong Kong’s electoral system — aimed at neutralizing pro-democracy voices — will curtail the clout of billionaires such as Li Ka-shing (李嘉誠) and Lee Shau-kee (李兆基), who used to wield effective control over one-quarter of the seats on the 1,200-member Election Committee that decides Hong Kong’s chief executive.
Under the new system, the moguls will lose more than 10 percent of their votes to smaller businesses and mainland Chinese companies.
The committee will also add 300 more seats, filled mostly by Beijing loyalists, further diluting the tycoons’ power.
It is the latest sign of a fall from grace for Hong Kong’s wealthiest families, who have been blamed by some Chinese officials and state media for failing to prevent anti-government protests in 2019 or fix deep-rooted problems such as housing affordability.
Beijing’s reliance on the tycoons has also shrunk markedly in the past few years as China’s economy ballooned into a US$14 trillion behemoth.
“The biggest loser in the overhaul is Hong Kong’s pro-democracy camp; the second-biggest loser is large property tycoons,” said Ivan Choy (蔡子強), who teaches politics at the Chinese University of Hong Kong. “Beijing no longer wants to negotiate with them at key elections.”
One of the biggest sources of friction is Hong Kong’s property market, the world’s least affordable.
The territory’s sky-high home prices stem from a colonial system that limits land supply while auctioning available plots with a government-decided floor price.
Local property moguls, who control the bulk of the buildings in the territory, have long been viewed as the biggest beneficiaries of the system and most opposed to any reforms.
Hong Kong’s top 19 wealthiest people have a combined net worth of about US$272 billion, which is equivalent to 74 percent of the territory’s GDP, according to the Bloomberg Billionaires Index.
Most of them made money starting out in the property business.
In an interview this week, Leung Chun-ying (梁振英), who served as the chief executive of the territory for five years through June 2017, said that the new electoral system would help the government tackle livelihood issues, including a shortage of housing.
“This is the root of a lot of social and economic problems in Hong Kong, housing shortage,” Leung told Bloomberg Television on Tuesday.
The comments by Leung, who is now the vice chairman of China’s top political advisory body, mean that Beijing wants the local administration to focus on resolving longstanding problems afflicting the former British colony.
Some of the tycoons came under fire at the height of the 2019 protests. For instance, 92-year-old Li — Hong Kong’s richest person — drew Beijing’s ire after he published a vague message in local newspapers that was widely interpreted as a call for not only halting the violence on Hong Kong’s streets, but also stressing freedom, tolerance and the rule of law.
China’s top law-enforcement body accused the tycoon of “encouraging crime.”
The electoral revamp signed off by Xi allows national security police to vet candidates for the Hong Kong Legislative Council, a step that would snuff out all pro-democracy voices and align with Xi’s call for “patriots” to be in charge.
Japan, the EU, the UK and the US have all condemned China’s moves.
In the previous system, top tycoons controlled key votes in deciding the chief executive, Choy said.
While they had traditionally voted for the candidate favored by Beijing, there were times when they came close to defiance, he said.
During the 2012 election, Beijing’s favored candidate, Leung, won with only 61 percent of the votes — the lowest among all chief executives — with many tycoons showing support for their peer billionaire Henry Tang (唐英年), siding with the pro-democratic opposition camp.
Local press widely reported at that time that China’s liaison officers in Hong Kong had to step up their efforts to rally support for Leung.
Besides Li and Lee, who founded two of Hong Kong’s best-known business empires, Adam Kwok (郭基煇), from the family behind the territory’s largest developer, and Adrian Cheng (鄭志剛), whose family owns a jewelry-to-property conglomerate, were also on the last committee for the 2017 chief executive elections.
Yet some of the tycoon electors are rallying behind the new system.
Hang Lung Properties Ltd (恒隆地產), whose chairman Ronnie Chan (陳啟宗) was on the committee in 2017, said that the group is supportive of China’s move “to improve Hong Kong’s electoral system.”
Robert Ng (黃志祥), head of Sino Group (信和集團) that owns properties including the Far East Finance Centre and the Conrad Hong Kong hotel, expressed enthusiasm in a statement sent to Bloomberg News through a representative.
Ng fully supports the change, “as it enhances the one country, two systems principle, and adds greater stability and prosperity to the livelihood of Hong Kong people,” the statement said.
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