CHIEF EXECUTIVE ANNOUNCES NEW EXECUTIVE COUNCIL

C O N F I D E N T I A L SECTION 01 OF 02 HONG KONG 000129 SIPDIS DEPT FOR EAP/CM E.O. 12958: DECL: 01/20/2019 TAGS: PGOV CH HK SUBJECT: CHIEF EXECUTIVE ANNOUNCES NEW EXECUTIVE COUNCIL APPOINTMENTS REF: (A) HONG KONG 114 (B) 08 HONG KONG 2197 (C) 08 HONG KONG 2093 Classified By: Consul General Joe Donovan for reasons 1.4 (b) and (d) ¶1. (C) Summary: Chief Executive Donald Tsang announced appointment of five new "non-official" members to his Executive Council, Hong Kong's inner cabinet, January 20. The new appointees are heavily weighted towards economic experience and familiarity with the Mainland economy. While one appointee, solicitor Anna Wu (wife of columnist Frank Ching) is seen as "friendly" to the pan-democrats, Tsang did not choose a serving pan-democratic politician or party leader. End summary. -------------- Changing of the Guard -------------- ¶2. (C) The January 20 Executive Council (ExCo) re-shuffle had been discussed since last year, with the widespread expectation that Chief Executive (CE) Tsang would want new blood appointed by him for the remaining years of his administration. At the press conference announcing the appointments, Tsang highlighted his appointees' "deep understanding across the spectrum of public affairs" and their "thorough appreciation of the rapid development of the Mainland." Appointees include: -- Businessman and Heung Yee Kuk Chairman (also Heung Yee Kuk Functional Constituency (FC) Legislator) Lau Wong-fat. (Note: the Heung Yee Kuk is the regional council in the New Territories representing the interests of indigenous communities there. End note.); -- Chinese University of Hong Kong Vice Chancellor Lawrence Lau; -- Solicitor and Shantou University Law Professor Anna Wu (wife of columnist Frank Ching); -- Businesswoman Marjorie Yang; and -- Businessman V Nee Yeh Party affiliation seems not to have been a criteria: No one was appointed to take up the "Liberal Party (LP) seat" vacated by Selina Chow, nor are the other appointees party-affiliated. Lau Wong-fat's appointment means only three serving LegCo members are in ExCo (the others being Democratic Alliance for the Betterment of Hong Kong (DAB) legislator Lau Kong-wah and independent Finance FC rep David Li.) ¶3. (C) The two candidates drawing the most attention are Anna Wu and Lau Wong-fat. As the head of Hong Kong's Equal Opportunities Commission (EOC),Wu was a fierce advocate against discrimination and critic of the government. This led observers to describe her as a "friend" of the pan-democratic movement, although she was not a member of a pan-democratic party. At the time, her activism led to her not being re-appointed for a second term at EOC. Asked at the press conference where she stood on democracy issues (and, tacitly, if she could work with this government),Wu said that her work at EOC reflected her drive to achieve in whatever work she takes on, and thus she welcomes a chance to contribute to Hong Kong in ExCo. Media have suggested Lau Wong-fat's appointment was a quid pro quo for Lau's not running against DAB legislator Ip Kwok-him for the District Councils FC seat (Lau stayed in the Heung Yee Kuk FC seat). Lau, formerly of the LP, also backed New Territories West DAB incumbent Cheung Hok-ming over LP incumbent Selina Chow in the September 2008 Legislative Council elections, which Chow alleged cost her the race and which led to Lau's resignation from the LP. ¶4. (C) Among those departing, the most common characteristic is that they were held over from CE Tung's era. Those departing include former Chief Secretary Rafael Hui, barrister Andrew Liao, CITIC Pacific Managing Director Henry Fan, former legislator Bernard Chan, and industrialist Victor Lo. Hui had continued in ExCo as an "unofficial" at CE Tsang's request after concluding his term as Chief Secretary. Chan was also tipped to depart following his decision to retire from his seat as Insurance FC representative in LegCo. Henry Fan is under investigation by Hong Kong's Securities and Futures Commission (SFC) because of concerns over the company's unauthorized currency bets. Liao was mainly expected to leave as one of former CE Tung's appointees rather than any substantive reason. HONG KONG 00000129 002 OF 002 ¶5. (C) At odds with this general trend is the departure of Lo, who is the only Tsang appointee departing, yet for whom there are no obvious grounds for departure. One possibility is that environmental concerns from one of Lo's factories on the Mainland (which the company has admitted and for which it is paying compensation) might be a negative for ExCo. Meanwhile Laura Cha, who was appointed by Tung and was tipped to stand down, is staying on for now. American-educated Cha served both with the Hong Kong SFC and the China Securities Regulatory Commission, the first non-Mainland PRC person appointed to a vice ministerial-level position. Given Tsang's announced focus on the economy, he may have wished to retain Cha's considerable expertise. Cha also heads the University Grants Committee, and thus may be seen as representing the higher education/research sector on ExCo. ¶6. (C) There had been press speculation that Tsang might extend an olive branch to the pan-democratic camp by appointing a Democratic Party (DPHK) member to ExCo. As reported ref B, the two most widely discussed names were DPHK Vice Chairman Sin Chung-kai and DPHK strategist Professor C.K. Law. Law himself dismissed the notion that Beijing would approve his or Sin's being appointed to ExCo. For the pan-democrats, ExCo is a double-edged sword. On the one hand, appointment to ExCo expresses respect for the movement and gets a democratic voice into the counsels of government. On the other, the confidentiality rule means the ExCo member cannot caucus with his or her party regarding the issues before ExCo, and the collective responsibility doctrine means the ExCo member should publicly support government policy. Since democrats would always be a minority, it's arguable that appointment to LegCo would silence, rather than empower, a democratic leader. -------------- Background -------------- ¶7. (SBU) The Executive Council, or ExCo, is an institution stretching back to Hong Kong's foundation as a Crown Colony. An advisory body to the Chief Executive, ExCo is meant to ensure the CE takes advice from key members of government and society before using his otherwise broad unilateral powers. Executive Councilors are bound by the doctrines of confidentiality, meaning they may not discuss ExCo deliberations with colleagues or the press, and collective responsibility, which officially means final decisions are represented as unified views. The composition of the Executive Council has varied over time, with a mix of senior government officials ("official members") and appointees from key sectors of society ("non-official members"). CE Tsang has continued former CE Tung Chee-hwa's tradition of having all heads of executive bureaux in ExCo. DONOVAN