Identifier
Created
Classification
Origin
06HONGKONG4027
2006-10-11 09:52:00
CONFIDENTIAL
Consulate Hong Kong
Cable title:  

HONG KONG CHIEF EXECUTIVE'S POLICY ADDRESS: "DON'T

Tags:  PGOV PREL PINR ECON ELAB SOCI CH HK 
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O 110952Z OCT 06
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8980
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
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C O N F I D E N T I A L SECTION 01 OF 03 HONG KONG 004027 

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DEPARTMENT FOR EAP, EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 10/11/2031
TAGS: PGOV PREL PINR ECON ELAB SOCI CH HK
SUBJECT: HONG KONG CHIEF EXECUTIVE'S POLICY ADDRESS: "DON'T
EXPECT TOO MUCH"

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

C O N F I D E N T I A L SECTION 01 OF 03 HONG KONG 004027

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SIPDIS

DEPARTMENT FOR EAP, EAP/CM
NSC FOR DENNIS WILDER

E.O. 12958: DECL: 10/11/2031
TAGS: PGOV PREL PINR ECON ELAB SOCI CH HK
SUBJECT: HONG KONG CHIEF EXECUTIVE'S POLICY ADDRESS: "DON'T
EXPECT TOO MUCH"

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


1. (C) Summary: In his second annual Policy Address on
October 11, Hong Kong Chief Executive (CE) Donald Tsang
reviewed his first year in office, detailed plans for his
current term, and outlined his views on the major challenges
that the next CE would face during the 2007-12 term. Tsang's
address was disrupted twice by protesters, including two
pro-democracy legislators who were ordered to leave the
chamber. Tsang said that during the past year he had sought
to implement strong governance, promote economic growth and
development, restore the Government's fiscal balance, and
improve the quality of life of the Hong Kong people. On the
negative side, Tsang listed as his greatest shortcomings the
public's rejection of his plan for the West Kowloon Cultural
District development and the rejection by Legco of his
proposals for electoral reform. For the remaining eight
months of his current term, he would continue to promote
economic development and also address various social issues,
including introduction of a limited and non-mandatory
proposal for a minimum wage. Tsang also promised to propose
policies to improve environmental quality and protection.
Looking further ahead, Tsang said the next CE would need to
address three issues: sustainable economic development,
furtherance of democracy, and building a harmonious society.
He deferred detailed discussion of plans for political reform
to the Commission on Strategic Development (CSD),which is
scheduled to issue its reform blueprint during the first half
of 2007. End Summary.


2. (C) Comment: Tsang's Policy Address, at 75 minutes the
shortest in memory, did not address several of the most
controversial current issues in Hong Kong, such as the

proposed Goods and Services Tax (GST),the recently enacted
law on covert surveillance, long-pending legislation on
racial discrimination, or the much-discussed need to improve
relations between the executive and legislative branches of
the Government. More significantly, Tsang touched only
briefly on plans for political and electoral reform, a topic
which he generally has avoided since Legco rejected his
proposals in December 2005. At the press conference
following his address, Tsang categorically denied that his
outline of future objectives was paving the way for his
reelection bid. Following the address, several
administration critics publicly criticized Tsang's speech:
former Chief Secretary Anson Chan told Hong Kong Cable TV
that she hoped the Government would play a more active role
in leading public discussions on Hong Kong's constitutional
development, and also take the initiative to formulate viable
and broadly acceptable policies to move towards universal
suffrage. Former Secretary for Security Regina Ip told Cable
TV that the Policy Address lacked long-term policy
objectives; specifically, she observed that the CE's proposal
on minimum wage was only a "delaying tactic." More sharply,
City University Professor and Civic Party Secretary General
Joseph Cheng told Radio Television Hong Kong (RTHK) that the
Policy Address was the "hollowest" of the past twenty years,
and suggested that Tsang was using the vibrant economy to
avoid dealing with more controversial issues. End Comment.

"Don't Expect Too Much"
--------------


3. (C) In his second annual Policy Address, delivered at the
Legislative Council on October 11, CE Tsang reviewed the
"achievements and failures" of his first year in office,
detailed the major activities planned for the remaining eight
months of his current term, and outlined his views on the
major challenges that the next CE (presumably Tsang) would
face during the 2007-12 term. In his introductory
pre-briefing for the consular corps, Professor Lau Siu Kai,
head of the Government's Central Policy Unit, advised the
assembled diplomats to not "expect too much" from the Policy
Address, as it would reflect only what Tsang thought he could
achieve in the remaining eight months of his current term.


4. (SBU) Tsang's address was disrupted twice by protesters:
first, before he began his remarks, League of Social
Democrats (LSD) legislators "Long Hair" Leung Kwok-heung and
Albert Chan loudly objected to Hong Kong's existing "small
circle" electoral system as well as its lack of a minimum
wage law; Legco President Rita Fan ordered the two
legislators to leave the chamber. Later in the speech, as
Tsang discussed his plans for a non-compulsory minimum wage

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in the cleaning and guard services sectors, members of the
pro-democracy "Hong Kong Confederation of Trade Unions"
standing in the public gallery demanded immediate enactment

HONG KONG 00004027 002 OF 003


of a comprehensive minimum wage law, resulting in a
ten-minute suspension of the session.

Achievements and Failures
--------------


5. (SBU) Noting that he would address both his achievements
during the past year and his "areas where there is still room
for improvement," Tsang described four accomplishments and
two setbacks. On the positive side, he had diligently sought
to implement "strong governance for the people."
Specifically, Tsang said his government had supported
expansion of Hong Kong's "Closer Economic Partnership
Arrangement" (CEPA) with mainland China, including expansion
of the "Individual Visit Scheme" to include tourists from
more areas of southern China. Another success was
accelerated public investment growth, largely through Legco's
approval of the new Government complex at the Tamar site in
central Hong Kong. The third major accomplishment was the
restoration of the Government's fiscal balance, primarily due
to the reduction in the size of the Civil Service and other
cost-saving measures. Finally, Tsang noted various
improvements in the quality of life of the Hong Kong people,
including freedom from avian influenza, food safety, and air
pollution concerns.


6. (SBU) On the negative side, Tsang listed the public's
rejection of his Government's plan for the West Kowloon
Cultural District development, which was one of the priority
goals of last year's policy address. He said the Government
would reassess and reformulate the plan for this project by
early next year. A second shortcoming, which he described as
the "biggest challenge in the past year," was the rejection
by Legco of his proposals for electoral reform and
constitutional development. Tsang said he was "responsible
for not securing the necessary support from the Legco," and
had since initiated new discussions through the CSD to
develop a roadmap for implementation of universal suffrage.

Remainder of the Current Term
--------------


7. (SBU) In preparing his Policy Address, Tsang said he had
held 32 separate consultation sessions with various Hong Kong
interest groups, and also reviewed recent Hong Kong public
opinion polls. He intended to use this information to
delineate the priority tasks for the remainder of his current
term, primarily promotion of economic development but also
various social issues. This would include capitalizing on
globalization and the "rise of China" to strengthen Hong
Kong's role as an international center of finance, trade,
tourism, and shipping. Other areas of emphasis would be
development of the information technology, cultural and
creative industries, as well as improvement of Hong Kong's
ability to host major international sports events.

Labor and the Minimum Wage
--------------


8. (SBU) Tsang, under pressure in recent months from
generally pro-Government and pro-Beijing labor organizations,
voiced cautious and qualified support for introduction of a
minimum wage. He said the Government would launch a "Wage
Protection Movement" for employees in the cleaning and guard
services sectors, through which the Government would, via
non-legislative measures, "encourage" firms to ensure that
those employees received adequate compensation and
protection. The Government would monitor the effectiveness
of this program and review its results after two years; if
the outcome was not satisfactory, it then would introduce
minimum wage legislation for those two sectors alone.

"Cherishing the Family"
--------------


9. (SBU) Tsang, describing "cherishing the family" as a "core
value of our community," addressed in some detail various
social initiatives to support and strengthen the family and
thereby address a variety of social problems. He said he
would consider establishing a "Family Commission" to
coordinate all policies in this area. He also described
several planned education initiatives, including new
government subsidies for early childhood and gifted child
education programs.

Environmental Protection
--------------

HONG KONG 00004027 003 OF 003




10. (SBU) Tacitly acknowledging that Hong Kong's
environmental quality, particularly in terms of air
pollution, has deteriorated in recent years, Tsang said that
the city "deserves and can afford a better living
environment." He said he would focus on the overall
strategic direction, set targets for different stages, and
introduce specific policy initiatives. He specifically
lauded the "Pearl River Delta Regional Air Quality Management
Plan," prepared in partnership with the Guangdong Provincial
Government to achieve specific emissions reduction targets by

2010. Tsang also said the Government had imposed emission
caps on Hong Kong power plants and would consider adopting
other new "polluter pays" standards to control vehicle
emissions, improve building energy codes, and enhance
wastewater and solid waste management.

Challenges for the Future
--------------


11. (SBU) In his concluding remarks, Tsang said it was
important for Hong Kong to set "bold goals" that could foster
consensus in the community. In that regard, he believed the
next CE would need to address three issues: how to sustain
economic development while promoting the well-being of the
people, society and environment; how to further develop a
democratic political system, as required by the Basic Law;
and how to build a "harmonious society." Regarding political
development, which was one of the themes of his 2005 Policy
Address, Tsang regretted Legco's December 2005 rejection of
his constitutional reform proposals, which he said would have
substantially enhanced democratic development. In the wake
of that defeat, Tsang has been "personally leading the CSD"
to study future constitutional development. Both the Hong
Kong and Central Governments were determined to achieve the
"ultimate goal" of election of the CE and the entire Legco
through universal suffrage. The CSD would issue its report
during the first half of 2007, which would provide a
blueprint for political development "covering 2012 and
beyond."
Cunningham