TWO GOVERNING TEAMS IN HONG KONG?

C O N F I D E N T I A L SECTION 01 OF 03 HONG KONG 000931

SIPDIS

DEPT FOR EAP/CM; ALSO FOR DRL

E.O. 12958: DECL: 05/15/2019
TAGS: PGOV PHUM CH HK MC
SUBJECT: TWO GOVERNING TEAMS IN HONG KONG?

REF: (A) HONG KONG 793 (B) HONG KONG 605 (C) HONG
KONG 129

Classified By: Consul General Joe Donovan for reasons 1.4 (b) and (d)


1. (C) Summary and comment: Central Government Liaison Office
(CGLO) Research Department Chief Cao Erbao's January 2008
Party School journal article describing "two governing teams"
in Hong Kong has recently surfaced to rekindle alarm bells
here about "one country, two systems." The uproar may have
more to do with inaccurate reporting and a desire by the
pan-democrats to drum up participation for the July 1 march.
We do not see a link with the reported "ten-point agreement"
between the CGLO and the Hong Kong government (ref B); Cao
does not even mention a role for Hong Kong delegates to
national bodies. Whatever the facts, however, Hong Kong
politics are now predicated on the belief that, since 2003,
the Mainland has sought to expand its control of Hong Kong,
allegedly on a model already achieved in Macau. Expressions
of this kind of concern are not new, but they are growing
louder which will prove a challenge to the government on
July 1 and then later as Hong Kong considers its ext stage
of democratic reforms this fall. Whil polling data suggest
the general public believe "one country, two systems" is
working well, thepublic also clearly values a strong
pan-democratc presence in LegCo as an advocate for
emocratic reforms. End summary and comment.

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Cao Erbao: Old oil...
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2. (C) As the news cycle on the rumored ten-point agreement
between the Hong Kong government and Central Government
Liaison Office (CGLO) was coming to an end (ref B),a
previously-ignored essay in the journal of the Central Party
School became the new cause celebre. CGLO Research
Department Chief Cao Erbao, writing in "Study Times" in
January 2008, described the existence of "two governing
teams" in Hong Kong. The first is the Special Administrative
Region Government (HKSARG),which "exercises the high degree
of autonomy according to the Basic Law, by authority
delegated by the Central Authorities." The second is the
"team of cadres of Central and Mainland Authorities carrying
out Hong Kong's work, which includes departments of the
Central Government and their external organs with
responsibilities in Hong Kong affairs or specializing on Hong
Kong work; departments of the Central government responsible
for other national affairs and relevant policies; and cadres
in the Government and CCP Committees of provinces, cities and
districts closely related to the Hong Kong SAR, who handle
matters involving Hong Kong." These organs -- the Hong Kong
and Macau Affairs Office (HKMAO) in Beijing; and the CGLO,
Ministry of Foreign Affairs representative office, and
People's Liberation Army garrison in Hong Kong -- have
existed since the handover.


3. (C) Read in isolation, Cao's essay simply describes the
status quo, in accordance with the Basic Law. His conception
of "two governing teams" starts as an explanation of the
change in Hong Kong since the handover. In Cao's mind, the
Hong Kong Government under the UK was part of the British
Government, whereas after the handover, the HKSARG and the
Central Government organs involved in Hong Kong are
administratively distinct. Cao explains the division of
responsibilities between the HKSARG (administering Hong Kong
under the Basic Law) and the Central People's Government
(SAR-central government relations, foreign affairs and
defense, and interpreting the Basic Law),and does not
propose any new powers for Beijing. The second team, Cao
explains, "does not interfere with (bu ganyu) the affairs
within the autonomy of the SAR."


4. (C) The article passed unnoticed but for a lone report in
Sing Tao shortly after its publication. However, with the
ten-point agreement filling headlines with concerns about the
breakdown of one country, two systems, an Apple Daily news
article and a South China Morning Post column by activist
Christine Loh brought Cao's article back to light. Both
these pieces fueled what became a public outcry with
propositions that were either erroneous or at best
extrapolations. Apple Daily's article erroneously reported
that Cao was proposing "setting up another governing group"
(Cao proposes no such thing; he sees the second team as in
existence since the handover). Loh, meanwhile, linked Cao's
conception of a "second governing team" to the discussion of
an increased role for Hong Kong's National People's Congress
(NPC) deputies and Chinese People's Political Consultative
Conference (CPPCC) delegates in Hong Kong affairs, which was
part of the rumored ten-point agreement (Cao never mentions
either).

HONG KONG 00000931 002 OF 003



--------------
...Poured on a Growing Flame
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5. (C) Whatever Cao said or intended to say in his essay, its
implications -- distorted, as noted above -- have added to a
growing sense of alarm at the perceived erosion of Hong
Kong's autonomy through encroachment by the Central
Government. Our contacts uniformly cite the July 1, 2003
march, which saw 500,000 Hong Kong people take to the
streets, as the watershed moment which convinced the Mainland
it must take a more active role in Hong Kong to protect its
equities. They allege Beijing has attempted to interference
in Hong Kong's autonomy by:

-- Bankrolling parties like the Democratic Alliance for the
Betterment of Hong Kong (DAB) to provide constituent services
and to use election day polling data to direct supporters to
particular electoral slates;

-- Bussing Mainland-based Hong Kong citizens back to Hong
Kong to vote. Some contacts allege Beijing used these voters
to propel the nominally independent Priscilla Leung to a
Legislative Council (LegCo) seat in 2008;

-- Brokering a deal by which Heung Yee Kuk Chairman Lau
Wong-fat chose not to contest the District Councils
Functional Constituency seat (clearing the way for the DAB's
Ip Kwok-him) in return for a seat on the Executive Council
(ref A);

-- Establishing the ten-point agreement mentioned above,
which grants Hong Kong's NPC deputies and CPPCC delegates a
more active role in Hong Kong affairs, the CGLO more say in
HKSARG government and advisory body appointments, and the
HKSARG the ability to propose nominees for the CPPCC. The
government, most recently Chief Executive Donald Tsang
during a LegCo question-and-answer session May 14, and
Beijing have steadfastly denied the existence of this deal;
and most recently,

-- Ordering the HKSARG to prevent Diaoyu Islands activists
from using a fishing vessel to visit the disputed territory,
on the pretext that the craft are not appropriate for
carrying passengers. Local activists, including
pan-democratic leaders, allege the CGLO wanted to avoid
harming newly-improved Sino-Japanese relations. Some
activists report the CGLO even offered funds to allow the
activists to depart from Taiwan rather than Hong Kong.


6. (C) The most active critic of Cao's article is Ching
Cheong, a Hong Kong journalist for Singapore's Straits Times
formerly imprisoned on the Mainland under highly questionable
charges of espionage. Ching has written commentaries and
spoken at several fora regarding the Cao article, regarding
it as a violation of Basic Law Article 22 ("No department of
the Central People's Government...may interfere in the
affairs which the Hong Kong Special Administrative Region
administers on its own in accordance with this Law.")
Pan-democratic leaders including Martin Lee told the
U.S.-China Economic and Security Review Commission the
article is another indicator of a growing encroachment on
Hong Kong by the CGLO. Lee contended the government was
trying to conceal the fact that the HKSARG has become a
puppet administration. Civic Party Vice Chair Alan Leong,
however, felt the government welcomed the pan-democrats'
raising questions that might cause the CGLO to hesitate,
because the HKSARG does not wish to be merely a puppet
government. Former LegCo member and NPC delegate Allen Lee
argued in a Ming Pao column that Cao was acting under
instructions, and his article represents an attempt to bring
out into the open what CGLO has been doing under the table
for some time. If there really are two ruling teams, Lee
argues, then the HKSARG is a puppet administration, because
the bottom line is that the Tsang administration is not the
one calling the shots.


7. (C) More centrist observers have been less definitive, and
some have even suggested that putting the CGLO's much-debated
covert activities into the public domain would at least make
CGLO's role transparent. Neither Chinese University
Professor Ma Ngok nor SynergyNet scholar Ray Yep ascribed
much importance to the article itself. Ma believes that the
central government lacks the expertise to run Hong Kong on a
day-to-day basis, and the question is where it will draw the
line in taking an active role. Yep argued that Beijing would
prefer to exercise its influence through proxies, but remains
nervous that this indirect method is not working. Yep sees
Beijing as unhappy with CE Tsang's preference for career
civil servants in his cabinet rather than Beijing's people.

HONG KONG 00000931 003 OF 003


In that regard, the NPC deputies and CPPCC delegates are more
reliably pro-Beijing, and Yep thus sees a Beijing motive for
the alleged ten-point agreement expanding their role. At a
recent Civic Party (CP) forum on the Cao article, CP member
Paul Zimmerman suggested it might be better for Hong Kong to
have CGLO's currently ambiguous role made transparent,
although he was not clear about why CGLO would admit it was
doing anything other than performing its normal functions
now. Yep agreed with Zimmerman to the extent that right now
there are many people claiming to represent Beijing, and it
might be good to define "who else" has that power besides the
CGLO and HKMAO. Even Allen Lee argues the Communist Party
should be allowed to register in Hong Kong openly and to
contest elections on an equal basis with other parties.


8. (C) The "official" answer from the pro-Beijing camp has
largely centered on describing Cao as a relatively junior
official and his essay as a think piece done as "homework"
for his course at the Central Party School. Basic Law
Committee member Lau Nai-keung wrote in his South China
Morning Post column that Cao had described nothing more than
the existing institutional arrangements between the HKSARG
and the central government, and accused the pan-democrats of
trying to make an innocuous article into a political issue.
Central Policy Unit (CPU - the HKSARG's in-house think-tank)
Senior Researcher Shiu Sin-por conceded that that, since
2003, there has been a general change by the central
government from a selective to "somewhat proactive" approach
towards Hong Kong. That said, Shiu also believes the article
was Cao's "homework," and that he probably didn't expect
anyone in Hong Kong would read the article. Like
SynergyNet's Yep, Shiu seemed to think that Beijing would
prefer to use proxies, describing a body of "about a
thousand" Hong Kong people who serve on provincial-level
People's Political Consultative Councils whom Beijing might
enlist in "united front" work. Since these people are Hong
Kong citizens, Shiu sees no conflict with the Basic Law.

--------------
The Macau Connection
--------------


9. (C) In arguing that the central government seeks to
increase its level of control over Hong Kong, a number of
observers have suggested that Beijing has already established
such a parallel governing structure in Macau. This argument
holds that Beijing was initially content to allow the
relatively successful Edmund Ho run Macau on his own.
However, the Ao Man-long corruption scandal shattered
Beijing's faith in Ho, and the central government has since
taken a more active role in Macau's governance. At a forum
convened by the Civic Party, Willy Wo-lop Lam contended that
there is already a team of cadres operating openly in Macau
in parallel to the Macau SAR government. (Comment: We will
report Macau observers' views on this issue septel; in
general they do not believe the Mainland is directly
administering Macau. End comment.)

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Comment: Chasing Ghosts
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11. (C) Whatever the elusive objective truth, the Hong Kong
body politic has accepted the notion that Beijing is
concerned by what it sees transpiring in Hong Kong and is
increasing the quantity and quality of its intervention. We
see three factors as indicative of the public's response.
First, observers predicted that Beijing's setting a timeline
for universal suffrage would remove the democracy issue from
the 2008 LegCo campaign, resulting in the pan-democrats
losing seats to a pro-Beijing camp that delivered better
grass-roots constituent services. However, the only seats
the pan-democrats lost in 2008 were those for which they
either gave up or ran an unpopular incumbent. This suggests
that the general public still supports politicians willing to
push for democratic development and challenge the
establishment. On the other hand, Hong Kong University
Public Opinion Project polling data from April 23 (several
days after the Cao article broke as a story) shows popular
confidence in "one country, two systems" at 72.9 percent,
which is in the upper half of the ten-point range shown in
the last few years. The third, less precise indicator will
be the banners under which people take to the streets on July

1. With the exception of a vocal Falun Gong contingent, July
1 marchers tend to avoid openly criticizing the Mainland
government. Should that change this year, it would be a
significant development.
DONOVAN