The Telegraph
Since 1st March, 1999
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China treads gingerly

Beijing, July 7 (Reuters): China’s new leaders, facing the possible collapse of the government they erected in Hong Kong, are bending on a contentious anti-subversion bill but for now at least are likely to stand by loyalist leader Tung Chee-hwa, analysts said today.

China has watched its hand-picked Hong Kong chief executive take the blame for a floundering economy, a sluggish response to a viral outbreak that killed hundreds, and legislation that critics fear could curb their civil freedoms. Now, his administration appears destined for policy paralysis.

The bill sparked the biggest Hong Kong street protests since those following the 1989 Tiananmen Square massacre. Analysts said Beijing had to be seen taking a softer line on Hong Kong in the most visible test yet of its “one country, two systems” model.

When Beijing picked Tung to run Hong Kong in 1997, it hoped he would run a dynamic administration that would show the British that China could maintain the former colony’s prosperity, and would convince Taiwan the “one country, two systems” formula was viable as a way of bringing the breakaway island back into the fold.

The former shipping baron has fallen short on both counts. But sacking him now would be admitting China’s experiment in self-governance had failed, and deal a further setback to hopes of recovering Taiwan.

“This is a crisis of the ‘one country, two systems’ policy,” said Jin Zhong, publisher of Hong Kong’s Open weekly magazine. “If Beijing negates Tung Chee-hwa, it would be tantamount to negating itself. Hence, it will continue to support Tung Chee-hwa,” he said.

Tung’s government, pressed by Beijing to put the anti-subversion article into law, reversed course this weekend and agreed to dilute some of its most sensitive provisions. Today it postponed final readings of the bill indefinitely.

China has been careful to avoid publicly entering the fray. But analysts said Tung’s climbdown could only have come with the blessing of China’s new leadership headed by President Hu Jintao.

Hong Kong legislator Allen Lee suggested today Tung might have to step down after an allied party leader resigned, leaving the government possibly short of votes needed to pass the bill. “Perhaps Beijing will conclude that Tung has become a liability and thus dump him before his term expires” in 2007, said Baum. “But don’t bet on it,” he added. “More likely, he will come under intense pressure to re-invent himself as a more hands-on, caring leader.”

The turmoil has thrust Beijing into a political minefield.

Foremost, analysts say, are China’s anxieties over social stability. The country’s Communist leaders are loath to watch a repeat of last week’s unrest, lest it encourage similar venting of grievances on the mainland.

With plans going ahead for a fresh protest, Chinese officials appeared to relent, telling Liberal Party leader James Tien and other sympathisers visiting Beijing that the law must be passed but the timing was up to Hong Kong. Still, Hong Kong media said delaying the bill would further undermine public confidence in Tung and paralyse his government. And by bowing to pressure, Beijing could also set a precedent it might regret. As one Chinese political scientist put it,“the next time there’s a big demonstration in Hong Kong, it would have to respond again.”

Hong Kong's post-handover constitution obligates the chief executive to resign when he “loses the ability to discharge his duties”. The Legislative Council also could force the issue through impeachment.

But Beijing dismissing Tung or engineering his resignation could irreparably damage the authority of the Beijing-backed Hong Kong government and further alienate Taiwan. “They musn’t be seen publicly as denigrating the ‘one country, two systems’ concept. Because if they do that, the whole game will be up,” the diplomat said.

Some analysts speculate President Hu Jintao and Premier Wen Jiabao, who succeeded an older generation of leaders headed by Jiang Zemin in March, might have the diplomatic finesse to hew a compromise now that Tung has bought some time.

Self-styled men of the people, they are viewed by many as reform-minded after a series of decisions to boost transparency and accountability during China’s fight against SARS.

“The old Jiang Zemin-style system would definitely be just to weather the storm,” said the diplomat.

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