ANSON CHAN RULES OUT RUNNING FOR TOP POLITICAL

C O N F I D E N T I A L SECTION 01 OF 02 HONG KONG 003872

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E.O. 12958: DECL: 09/27/2031
TAGS: PGOV PHUM PINR PREL HK CH
SUBJECT: ANSON CHAN RULES OUT RUNNING FOR TOP POLITICAL
POSITION

REF: HONG KONG 2210

Classified By: Consul General James B. Cunningham. Reasons: 1.4 (b,d)


1. (C) Summary: In a move undoubtedly welcomed in Beijing,
former Hong Kong Chief Secretary Anson Chan announced on
September 23 that she would not contest the 2007 Chief
Executive (CE) election, removing the most serious
complication for incumbent CE Donald Tsang's reelection bid.
Chan told the Consul General prior to the announcement that
she had informed Tsang and Beijing last December that she did
not intend to contest the election. According to Chan, they
did not believe her and remained skeptical of her motives.
Although, Chan maintained, she never intended to run, over
the ensuing months she kept the idea of a possible CE
candidacy alive in order to generate debate on political
reform. While obviously concerned about the prospect she
would run and embarrass both Beijing and Tsang, the PRC
Government had not directly tried to convince her to stay out
of the race, she said. "They know that a direct approach
might actually have encouraged me." But Beijing supporters
launched a campaign in the press to discredit her motives and
patriotism, and portray her as an instrument of the U.S.,
giving her a taste of what an eventual campaign would be
like. Against the background of waning poll numbers over the
summer, Chan, who values her ties with Beijing, concluded
that the personal political cost of running, and thus
confronting Beijing, in a contest she could not conceivably
win, was too high. "If I had any chance of winning, I might
have decided differently," she told the Consul General.


2. (C) Having apparently concluded that challenging Tsang in
a losing contest would undermine her influence, she intends
to remain engaged in Hong Kong and with Beijing on Hong
Kong's future. During the press conference, Chan also
announced the long-awaited formation of a six-member "core
group" that would work towards "shaping the constitutional
reform agenda" and would promote universal suffrage and good
governance. She told the Consul General she had hoped to
have members of the business community in her group, but none
would openly join for fear of offending Beijing or Tsang.
She assured the CG that she would have active support from
pro-democracy business people behind the scenes, however.
With Chan out of the running, the latest speculation in Hong
Kong is that Civic Party legislator Alan Leong likely will be
the pan-democratic CE candidate.


3. (C) Comment: Beijing and its supporters, in ways both
subtle and not, are influencing Hong Kong's political space.
Chan's public decision greatly reduces the ability of
pan-democrats to launch a significant challenge to Tsang,
although Chan will continue to provoke a debate on key issues
of Hong Kong's future. Beijing is attempting to block votes
for an alternative candidate to Tsang in the election
committee, and committee members will have a hard time
deciding to risk backing a challenger who lacks Chan's appeal
and stature. Chan believes that through her "core group" she
will be able to play a more productive, less 'politicized'
role from outside the CE election process. She made it clear
she intends to remain a force to be reckoned with. This
episode reflects Beijing's success in influencing Hong Kong
elites without heavy-handed intervention. End Summary and
Comment.

Chan: I Never Intended to Run
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4. (U) Retired former Hong Kong Chief Secretary Anson Chan
officially announced on September 23 that she would not
contest the 2007 Chief Executive (CE) election, ending more
than nine months of speculation. She had never intended to
participate in the CE election and had made clear last year
that she would not run, according to Chan. "If I have caused
disappointment to some people because they expected me to
run, I am very sorry." Chan denied she made the decision
because she had little hope of defeating incumbent CE Donald
Tsang. She added, however, "The present rules of the game

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really do not encourage eligible people to run for the
elections." Chan told reporters that she called Tsang on
September 22 to inform him that she did not intend to run; a
Government spokesperson said Tsang was "grateful" for Chan's
call and that the HKG welcomed ideas on constitutional reform
from anyone. When asked whether she would support Tsang's
reelection bid, Chan noncommittally replied, "I will support
anybody with integrity who will shoulder responsibility and
can rule Hong Kong with an open and transparent attitude to
implement 'one country, two systems.'"

HONG KONG 00003872 002 OF 002



"Core Group"
--------------


5. (U) As promised in mid-July, Chan also announced the
formation of a six-member "core group" that would work toward
"shaping the constitutional reform agenda" and would promote
universal suffrage and good governance. "Core group" members
include: Allen Lee, a well-connected National People's
Congress (NPC) delegate and media personality who is
increasingly pro-democracy; Lily Yam, former head of the
Independent Commission Against Corruption; Johannes Chan,
head of the law faculty at the University of Hong Kong;
Christine Loh, Civic Exchange founder and Chief Executive;
Elizabeth Bosher, former Deputy Secretary for Constitutional
Affairs; and Chandran Nair, founder of the non-profit group
Global Institute for Tomorrow. Chan stressed that her group
would not challenge the Hong Kong or Central Governments, but
would work to advance the debate on democracy and the
strength of good governance in Hong Kong. Chan said she had
difficulty recruiting business people to join her group,
because many of them did not want to jeopardize business
interests in Hong Kong and Beijing. On September 27, Chan
gave a speech focused entirely on governance and questioned
the Government's proposal to develop the political
appointment system by creating posts of Deputy Director and
Assistant to Directors of Bureaus; she made clear her desire
to make a clear demarcation between career civil servants and
politically appointed senior government officials.

Pragmatic Hong Kongers Want "Safe Hands" to Guide City
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6. (C) Executive Committee member Anthony Cheung speculated
to poloff on September 26 that Chan had seriously considered
contesting the CE election, but decided against it after
seeing her popularity ratings decline over the last few
months. (Note: A September poll conducted by Chinese
University showed Tsang with a popularity rating of 56.5
percent, with Chan trailing at 23.8 percent. End Note.)
According to Cheung, Chan knew all along that she would not
have Beijing's endorsement and would not win the election.
If Chan were to lose in a popularity contest against Tsang
during the election process, however, it would constitute a
tremendous setback to her influence and would exhaust her
political capital. Cheung said he was not surprised by
recent polls showing Tsang's high popularity ratings. Hong
Kongers are pragmatic people and ultimately, they want the
CE's office in "safe hands." While Chan and Tsang both had
government experience, Tsang was younger and had better
relations with Beijing, noted Cheung. He downplayed Chan's
"core group" and said that he did not expect it to be
particularly important or influential in Hong Kong politics.
Although Chan has ruled herself out of the CE race, Cheung
opined that her influence would grow if she positioned
herself as a bridge between the establishment and the
opposition and played a role in bringing together the two
sides.

Democrats Disappointed But DAB Full of Praise
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7. (U) Democratic Party (DP) Chairman Lee Wing-tat told the
press that Chan's decision would not disrupt the democrats'
election plans, but acknowledged that the democrats might
face a more difficult time garnering the 100 nominations
required to stand in the CE election. Jasper Tsang, former
Chairman of the Democratic Alliance for the Betterment and
Progress of Hong Kong (DAB),said that Hong Kong would
benefit from Chan's decision. "She can now assume a
transcendent position to work on a reform proposal," said
Tsang.

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Speculation Gathers on Democrats' CE Candidate
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8. (SBU) With Chan out of the running, the latest speculation
is that Civic Party legislator Alan Leong will be the
democrats' likely CE candidate. However, democrats have
already begun lowering expectations. DP Chairman Lee told
the press that amid heavy lobbying by Beijing, the democrats
might not succeed in securing enough nominations to stand in
the CE race.
Cunningham