How China Can Recover Even If Hong Kong’s Carrie Lam Quits

(Bloomberg) -- Months of massive and often violent protests in Hong Kong have driven the popularity rating for the city’s Beijing-backed leader, Carrie Lam, to historic lows. Lam herself has taken the blame for the “entire unrest” after introducing -- and then withdrawing -- a bill that would have for the first time allowed extraditions to mainland China. The Financial Times has reported that the Chinese government was drafting plans to install a new “interim” leader by March. But replacing a Hong Kong chief executive is a complicated, closed-door affair that is deeply entangled with the central problem facing the Asian financial hub: How do you balance the people’s desire for autonomy with China’s demands for control?

1. What happens if Lam goes?

Responsibility for leading the city of 7.5 million would fall initially to Chief Secretary for Administration Matthew Cheung. Hong Kong’s Basic Law -- the “mini-constitution” drafted before the former British colony’s return to China in 1997 -- says the chief secretary can act as chief executive for as long as six months. During that interim period, the 1,200 members of the Election Committee must meet to select a new leader. The panel is comprised of political insiders overwhelmingly loyal to the government in Beijing, giving China’s Communist Party the ultimate say.

2. Who might seek the job?

China’s pattern of promoting up-and-comers through the chief secretary’s job puts the spotlight on Cheung. But the former longtime labor secretary lacks the profile and broad experience of predecessors, including Lam, who last year denied local media reports that she was considering replacing him. The Financial Times report described former Hong Kong Monetary Authority head Norman Chan and former Chief Secretary Henry Tang as leading candidates. The report also mentioned Financial Secretary Paul Chan and top Lam adviser Bernard Chan, but they are viewed as close to the current administration. Others who have sought the job before may be viewed as too hard-line, such as Executive Council member Regina Ip, or too sympathetic to the opposition, such as ex-Financial Secretary John Tsang.

3. How does the election go?

While the campaigning looks a lot like any mayoral election, with stump speeches, rallies and policy platforms, the choice rests with an electoral college comprised primarily of business and political elites, including several of Hong Kong’s billionaires. China can veto any winner it doesn’t like. That’s how Lam soundly defeated Tsang to win the 2017 election, even though he held a wide lead in public opinion polls. Her winning tally of 777 had the unfortunate coincidence of sounding like a Cantonese expletive.

4. Is there no popular vote?

Not for chief executive. One of the main demands of this year’s protests has been for the introduction of popular elections for the top job -- something Hong Kong has never had. Elections for the 479 members of the 18 district councils are scheduled for Nov. 24. The pro-establishment camp has had a majority of the councils in years past, so they were able to secure all of the 117 seats allotted to them in the Election Committee.

5. Has a chief executive quit before?

Yes. Hong Kong’s first post-colonial leader, Tung Chee-hwa, faced massive protests in 2003 against national security legislation backed by China, which he eventually withdrew. Tung, a Shanghai-born shipping magnate, lingered in the job for more than a year while China’s Communist Party settled on a succession plan. He ultimately resigned in 2005 under the Basic Law provision allowing a chief executive to step down if “he or she loses the ability to discharge his or her duties as a result of serious illness or other reasons” -- the same grounds Lam would need to cite if she quit. Lam, 62, told business leaders in August that she would quit, “if I had a choice,” according to audio recording obtained by Reuters.

6. How long would any successor serve?

That’s something of an open question. When Tung stepped down, China’s parliament interpreted the Basic Law to mean the new leader would serve the remainder of the old term. But that decision “uses language that makes clear that interpretation is not applicable in future situations,” according to Danny Gittings, a legal scholar and author of “Introduction to the Hong Kong Basic Law.” Theoretically, China could decide differently this time around. In any case, Lam’s term expires June 30, 2022.

The Reference Shelf

• QuickTakes on the protests, Hong Kong’s autonomy, its emergency law and its preferential trade status.
• Flashback to Lam’s 2017 election victory: “My priority will be to heal the divide and to ease the frustration.”
• How the Basic Law outlines the chief executive’s role.
• China calls the shots: Bloomberg infographic.
• The 2019 protests in photos.

©2019 Bloomberg L.P.