H.K. Protests Loom as Tsang Support Sinks

By Sophie Leung and Richard Frost, Bloomberg
June 29, 2011

Hong Kong's widening wealth gap, with home prices soaring 70 percent since the start of 2009, may prompt an increased turnout in annual protests this week as the territory's leader suffers his lowest poll ratings yet.

Chief Executive Donald Tsang's failure to tackle Asia's biggest rich-poor divide has seen his support drop to a score of 46.5 in a survey of 1,000 Hong Kongers taken during the week to June 8, the worst since he took office in 2005, the University of Hong Kong's Public Opinion Programme shows. Respondents were asked to rate him on a scale from 0 to 100.

"People think Donald Tsang favors the interests of big business, and this is the reason behind his apparent refusal to resolve the housing issue or narrow the wealth gap," said Joseph Cheng, a political science professor at City University of Hong Kong. "Dissatisfaction against the government is certainly rising, and we will probably see more protests," including at a July 1 rally commemorating the Chinese annexation of the former British colony of Hong Kong, he said.

Tsang's unpopularity parallels trends across Asia, where economic development, inflation and rising asset prices have deepened discontent among lower-skilled workers. Singapore's ruling party saw record support for the opposition in elections last month, and China has arrested local officials in the aftermath of protests over abuse of power as inequality grows.

Record Poverty

A record 1.26 million among Hong Kong's 7 million population lived in poverty as of mid-2010, according to a government advisory group, even as the combined wealth of the 40 richest surged 20 percent to $163 billion in January from a year earlier, Forbes magazine said. The rich-poor gap is Asia's widest, based on United Nations data.

Tsang "will continue to adopt a pragmatic and balanced approached to governance," his office said in an e-mailed response to a Bloomberg News inquiry. "The government would continue to listen to public views and opinions in a humble and open manner."

The term of the chief executive, who is elected by a group of people appointed by China's central government, ends on June 30, 2012.

The support for Tsang, 66, hasn't yet reached the lows endured by predecessor Tung Chee-hwa, who resigned after hundreds of thousands took to the streets calling for his ouster. Tung oversaw a surge in unemployment and a property bust that had thousands of homeowners owe mortgages greater than their property values. Ex-Governor Chris Patten, who managed the Hong Kong handover, maintained support in excess of 50.

Governance Crisis

"A further dip in Tsang's backing to level of 45 could signal a governance crisis," said Robert Chung, poll director of the Public Opinion Programme.

Planned payments of HK$6,000 ($770) per Hong Kong citizen and the introduction of a minimum wage haven't boosted the popularity of Tsang, a policeman's son. Inflation was 5.2 percent in May, the fastest pace in almost three years. China's top official on Hong Kong, Wang Guangya, warned the city's leaders this month that home prices may turn into a "political problem," and urged more care for ordinary Hong Kongers.

Hong Kong's retail rents have climbed 27 percent since the start of 2009, according to Colliers International, making it harder for smaller businesses to stay in operation without moving to less-popular areas of the territory.

"With July 1 fast approaching and public anger constantly surging, the government should better be prepared," Chung said in a report accompanying the poll, which has a margin of error of 4 percentage points.

Hong Kong police spokeswoman Janet Lui said a permit has been issued for the rally on July 1. While declining to forecast how many people may turn out, Lui said the organizer had applied for a rally of 50,000.

Tsang started office with a record-high rating of 72.3 in 2005, benefitting from perceptions of competence in handling the Asian financial crisis of 1997-98.