1 Talking Point 4 The Week in 60 Seconds 5 Aviation Week in China 6 M&A 7 Energy and Resources 8 Banking and Finance 11 Chinese Character 30 March 2012 13 Society and Culture Issue 144 18 And Finally www.weekinchina.com 19 The Back Page The fight over Hong Kong m o c . n i e t s p e a t i n e b . w w w y b g u in Last weekend’s election in Hong Kong could have far-reaching consequences for China o k y n o a t B s t l t h a e g b k u o r o l a r G M B C d B n S a H Week in China Talking Point 30 March 2012 This time it wasn’t dull China mulls the consequences of Hong Kong’s erratic election The new boss: CY Leung won last Sunday’s election to lead Hong Kong tanley Ho, the casino mogul, but wanted to highlight the inade - A quick recap... Sonce said that he would quit quacies of the electoral system. Until recently, Tang was the shoo-in Hong Kong if CY Leung became Hong Kong’s election this year candidate, as well as Beijing’s choice, Hong Kong’s chief executive. has been significant, standing out for the top job. In fact, Ming Pao According to Ho, Leung “hates as the most rancorous, divisive and Daily reckons that Leung was seen as the rich” and the tycoon may not be scandal-plagued leadership battle a makeweight, there only to provide the only one to think so. The South to date. a veneer of competition. China Morning Post speculated this And for the first time since 1997, Certainly Tang seems to have month that, despite urging from Beijing seems to have been wrong - taken the chief executive job for Chinese vice president Xi Jinping, footed by events, as its succession granted, failing initially to elaborate Li Ka-shing, Asia’s richest man, also plans for the top job in Hong Kong on his policies or show much en - refused to vote for Leung in last blew up. thusiasm for political debate. Sunday’s election. The businessman Many think the ramifications That didn’t impress the wider told reporters he would vote for could be far-reaching. Some suggest public. The beneficiary of inherited Leung’s rival, Henry Tang. that come the next election in 2017, wealth (the son of a Shanghai in - Both the billionaires backed the China’s leaders may decide the cur - dustrialist), Tang was soon being losing candidate. That’s because an rent system is more trouble than its portrayed as lazy – and likened to a election committee of 1,193 mem - worth, and endorse a more demo - pig by the more vitriolic elements bers has chosen Leung as Hong cratic ballot. of the local press. P h o t o Kong’s next leader. He secured 689 Others demur, predicting a re - For the people of Hong Kong, S o u r votes, beating both Tang and Albert doubling of Beijing’s efforts to Leung was easier to identify with. A c e : R e Ho, a pro-democracy campaigner stage-manage results of the next policeman’s son, he found his feet in u t e r s who ran with no hope of winning leadership vote. the property business before mak - 1 Week in China Talking Point 30 March 2012 ing the transition into politics (the he appeared to blame his wife for suggests they were worried that they BBC calls him a “self-made busi - the illegal basement. It was desper - would be seen as foisting him on nessman”). Until last year, he was ately ill-judged, given that his wife Hong Kong. Certainly, the bolder also convener of Hong Kong’s Exec - had publicly stood by him even as newspaper editorials were predict - utive Council, its cabinet. he admitted “straying” in his mar - ing that half a million Hongkongers Yet Leung is not without critics, riage earlier in the campaign. could march if Tang triumphed – especially those who query his Of course, public opinion should - much as they did in 2003 to protest rapid rise within the leadership n’t really matter in a contest in against the anti-subversion laws ranks and suspect that he is a closet which a tiny election committee (after which Beijing backed down, member of the Chinese Commu - takes its political cues from Beijing withdrawing the bill). Hence, the nist Party. in deciding the winner. shift of official support to Leung. Tai - Although he has firmly denied But a week before the election, wan’s Central News Agency saw the accusations, Leung’s decision to the afore-mentioned Liaison Office China’s decision to switch support as visit the Liaison Office of Hong seems to have started to urge the a signal that Beijing wants to stay on Kong & Macau Affairs (China’s de electors to switch to Leung instead. the right side of public opinion, even facto ‘embassy’ in Hong Kong) the Ditching Tang at the last minute in races that it controls. day after his election (he doesn’t take office until July 1) was also much remarked upon. The grumble was that it proved Leung cared more about showing his gratitude to Beijing than listen - ing to the concerns of local people. That leads to questions of whether Leung might have duped the wider public into believing that he is more reform-minded than he really is. Tang alluded to this dur - ing campaigning, with the sugges - tion that Leung had called for the use of riot police and tear gas dur - ing a huge public demonstration against proposed anti-subversion laws in 2003. Back to the animal metaphors currently doing the rounds in the Hong Kong press: the Apple Daily has been casting Leung as wolf to Tang’s pig, implying a cunning and In the future, issuers untrustworthy individual. will need to be explorers. Why did Tang’s campaign start to In challenging markets you have to look beyond old, familiar unravel? ways. HSBC’s Debt Capital Markets teams have a track record of creating innovative structures and delivering landmark deals. Tang stumbled from one gaffe to an - Cross border and cross discipline, we connect investment other, admitting adultery, apologis - banking advice with financing solutions – to help our clients ing for an illegally-built basement navigate the future. There’s a new world emerging. and refusing to comment on ru - There’s more on debt issuance at www.hsbcnet.com/dcm mours about an illegitimate child (see WiC140). Public support dwindled with each new story. Tang’s approval rat - HSBC operates in various jurisdictions through its affiliates, including, but not limited to, HSBC Bank plc, authorised and regulated by the Financial Services Authority, The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (USA) Inc., member of NYSE, FINRA ing dipped below 20% after he and SIPC, and HSBC Bank USA, NA. 11-094 called a press conference in which 2 Week in China Talking Point 30 March 2012 Tang lost, but the public still un - happy, it seems? In truth, only 1,200 people out of Planet China Hong Kong’s 7 million population Strange but true stories from the new China got to vote on Sunday, with most of the electoral committee selected MISSING MASERATI. Bus drivers in Jinhua in Zhejiang province are now as pro-Beijing political and busi - much more knowledgeable about luxury cars than their counterparts ness elites. elsewhere, reports Zhejiang Online. That’s because the city’s public No wonder, then, that China’s in - transport bureau is circulating diagrams of the names and logos of luxury ternet users seem to have been less cars. The message: don’t crash into them. As WiC reported in issue 139 there have been a number of traffic accidents involving top-price cars, interested in the outcome of Hong with repair bills almost bankrupting the drivers involved. Bus companies Kong’s leadership election than the also fear the cost of a collision with the likes of a Rolls-Royce, hence national elections in Taiwan (see Jinhua’s decision to make drivers aware when to steer clear. WiC135) or even the more recent vil - A staff member who spoke to Zhejiang Online said that most drivers lager vote in Wukan in Guangdong knew the logos of luxury cars like BMW and Mercedes-Benz but had no (see last week’s issue). idea about super-expensive marques such as Maserati and Lamborghini. “You Hong Kong people are get - “You think about it, a collision with those luxury cars costs several ting poorer and poorer. Chinese hundred thousand yuan,” said one bus driver. “How can we afford this people are becoming richer… Hong compensation? So when we see luxury cars we now avoid them.” Kong’s election isn’t even a real one. The move is not without controversy. Netizens say the city’s richest Save your time and energy to make folk now enjoy another privilege: the right of way over buses. Another a little money,” was one dismissive hammer blow to China’s socialist paradise... comment online. Still, Leung versus Tang had more of the look-and-feel of a democratic Still, with China’s reformist fac - Alongside the optimism there contest than the previous leader - tion in the ascendant (see issues 140 has also been gloomier coverage of ship run-offs in Hong Kong. At least and 142), others think that Hong the conservative instincts of the Tang and Leung participated in tel - Kong’s next leader might be selected Chinese political elite.