CPPCC CHAIRMAN JIA QINGLIN VISIT TO HONG KONG:

C O N F I D E N T I A L SECTION 01 OF 02 HONG KONG 002587

SIPDIS

NOFORN
SIPDIS

DEPARTMENT FOR EAP AND EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 06/22/2031
TAGS: PGOV PREL PINR CH HK
SUBJECT: CPPCC CHAIRMAN JIA QINGLIN VISIT TO HONG KONG:
CEREMONY OR SUBSTANCE?

Classified By: E/P Section Chief Simon Schuchat; Reasons 1.4 (b, d)


1. (C) Summary: Chairman Jia Qinglin of the Chinese People's
Political Consultative Conference (CPPCC) will visit Hong
Kong June 27-29 to attend the "Mainland, Hong Kong and Macau
Trade and Economic Cooperation Forum," which will mark the
third anniversary of the signing of the Hong Kong-PRC Closer
Economic Partnership Arrangement (CEPA). During his visit,
Jia also will meet with local political and business leaders
and host a banquet to which all members of the Legislative
Council (Legco) and Executive Council (Exco) have been
invited, although many of the pro-democracy legislators are
not likely to attend. One independent democratic Legco
member told us that the visit would constitute a very
significant expression of support for Chief Executive Tsang,
while an Exco member said we would need to examine whether
Jia goes beyond "courteous words of support" to assess
whether the visit represented explicit support for Tsang or
just more general support for the HKSAR. On the economic
side, Trade and Industry Department Deputy Director General
Raymond Young said Jia may use the occasion to unveil some
expansion of CEPA preferences, although there were no plans
for either a formal signing ceremony or a packaging of the
measures into a "CEPA IV." End Summary.


2. (SBU) Chairman Jia Qinglin of the Chinese People's
Political Consultative Conference (CPPCC) will lead a
700-member delegation to Hong Kong June 27-29. This will be
the first official travel to Hong Kong by Jia, who ranks
fourth in the PRC Politburo, since he was appointed CPPCC
Chairman in 2003. It also will be the first visit to Hong
Kong by a high-level central government official since the
December 2005 defeat of Chief Executive Donald Tsang's
proposals for constitutional reform, which were supported by
Beijing. The last senior leader to visit Hong Kong was Vice
President Zeng Qinghong in September 2005.

CEPA Anniversary
--------------


3. (SBU) During his visit, Jia will deliver the keynote
speech at the opening of the "Mainland, Hong Kong and Macau
Trade and Economic Cooperation Forum," which has been jointly
organized by the Hong Kong Special Administrative Region
Government (HKSARG) and the PRC Ministry of Commerce to mark
the third anniversary of the signing of the Hong Kong-PRC
Closer Economic Partnership Arrangement (CEPA). Chief
Executive Tsang, Macau Chief Executive Edmund Ho, Minister
of Commerce Bo Xilai, PRC Hong Kong Macau Affairs Office
(HKMAO) Director Liao Hui, and other senior PRC officials are
scheduled to attend the forum. During his visit, Jia also is
scheduled to visit the Hong Kong Stock Exchange, the Hong
Kong Monetary Authority, a "middle-class family", the
recently opened Wetland Park, and the Cyberport. He also
will hold closed-door meetings with local NPC and CPPCC
delegates and meet with former Chief Executive Tung Chee-Hwa.


Support for the Chief Executive?
--------------


4. (C) On June 28, Jia will host a banquet for Hong Kong
business, community, and political leaders, including all
members of the Executive Council (Exco) and the Legislative
Council (Legco). While most of the pro-Beijing legislators,
including all ten Liberal Party members and most of the
Democratic Alliance for the Betterment and Progress of Hong
Kong (DAB) contingent, are expected to attend the banquet,
independent democratic Legco member Albert Cheng told us on
June 22 that the pro-democracy Democratic Party (DP) and
Civic Party (CP) each would send just one or two members.
Cheng said he and most of the other independents would find
"excuses," such as an urgent Legco meeting to work on the
pending covert surveillance legislation, to skip the event.
The DP and CP are preparing a joint petition, urging
acceleration of Hong Kong's democratic development and
implementation of universal suffrage, for submission to Jia
during his visit. As usual, independent legislator "Long
Hair" Leung Kwok-hung has vowed that he will stage a protest
during the banquet.


5. (C) Conversely to the democrats, some pro-Beijing groups
in Hong Kong may seek to use the Jia visit to bolster their
position as well as that of incumbent Chief Executive Tsang
in the run-up to the December elections for the Election
Committee that will select the next Chief Executive, widely
expected to be Tsang, in March 2007. Albert Cheng told us

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that the visit constituted a very significant expression of
support for Chief Executive Tsang and was "not just
ceremonial." Executive Council member Anthony Cheung was
more circumspect, telling poloff on June 22 that we would
need to examine whether Jia went beyond "courteous words of
support" in order to assess whether the visit marked a
reiteration of Beijing's backing for Tsang personally or just
more general support for the HKSAR.

Bearing Gifts from Beijing
--------------


6. (SBU) For several weeks, rumors have been circulating in
Hong Kong that Jia would unveil some "concessions" to boost
the Hong Kong economy during his visit. On June 20, Trade
and Industry Department Deputy Director General Raymond Young
said Jia might use the occasion of the third anniversary of
the signing of CEPA, which is Hong Kong's free trade
agreement with China, to roll out an expansion of CEPA
preferences. Young said that the legal, audiovisual,
telecommunications, tourism, and construction sectors would
all benefit from new market liberalization measures. The
details would be hammered out in a meeting between PRC
Vice-Minister of Commerce Liao Xiaoqi and Financial Secretary
Henry Tang early next week. Young said there were no plans
for either a formal signing ceremony or a packaging of the
measures into a "CEPA IV." This is in reference to the fact
that to date, CEPA has been expanded in three distinct
phases, the latest of which gave all products manufactured in
Hong Kong tariff-free entry into the mainland.


7. (SBU) The primary impact to date of CEPA has come from its
tourism provisions, which committed the mainland to allow
individual visits by some of its citizens to Hong Kong. The
ensuing expansion of the individual visitors program
throughout cities in Guangdong and beyond has been a key
element of Hong Kong's above-trend economic growth since the
end of the SARS outbreak in the summer of 2003. CEPA has
also been credited with boosting Hong Kong's image in the
eyes of foreign investors, with expanding opportunities in
service sectors like banking and logistics, and with niche
gains in manufacturing. Taken together, CEPA is estimated to
have created 30,000 jobs since it went into effect on January
1, 2004.

Cunningham