China-backed Hong Kong candidate eyes growth to quiet unrest

[HONG KONG] Carrie Lam, widely seen as the frontrunner to lead Hong Kong, vowed to avoid moves that could revive anti-China street protests, and focus on revving up the economy if she's picked to run the financial hub.

"I have to be very careful in sort of taking on an issue which has a very strong potential of splitting the society again," Ms Lam, 59, told Bloomberg in an interview Thursday. "Once we have some of that sort of mutual trust, I'm sure in the usual Hong Kong spirit we can tackle some of those more difficult issues."

The former chief secretary's popularity has suffered in recent weeks amid media reports that Chinese leaders had anointed her to win next month's vote by a committee of 1,200 business and political elites. Her main rival, former Financial Secretary John Tsang, said he would do a better job at healing divisions over concerns that Beijing is encroaching on the "high degree of autonomy" promised the former British colony before its return to China two decades ago.

While rank-and-file voters have no say in the March 26 decision, the government's critics have argued the city's next leader needed greater public support to counter growing discontent. The current chief executive, Leung Chun-ying, struggled with historically low public approval ratings before his surprise decision in December not to seek a second five-year term.

Ms Lam, a career civil servant who would be Hong Kong's first female leader, enjoyed relatively high approval as Mr Leung's No 2 before stepping down to run for his job. She acknowledged that perceptions of Beijing's endorsement had dented her image, even as she continued to canvas for support among the election committee.

"It is demonstrated by the so-called popularity polls," Ms Lam said. "I just don't see what I have done wrong in the last two or three weeks, but my poll seems have come down a bit." Ms Lam trailed Mr Tsang by 14 percentage points in a South China Morning Post poll of 1,018 adults released Feb 10, compared with 4.4 per cent a month earlier. Meanwhile, 66 per cent believed Ms Lam would win the job, a 20-point increase from the previous poll.

Meet the candidates seeking Hong Kong's top job. On Feb 5, Zhang Dejiang - the Communist Party's No 3 leader - told Hong Kong business executives and political leaders during closed-door meetings in neighbouring Shenzhen that Ms Lam was the preferred choice, the Standard newspaper reported, without saying where it got the information. On Wednesday, 51 election committee members representing political advisers to Beijing pledged support for Ms Lam, the Post reported, citing the group's convenor, Ambrose Lau.

Over the past five years, Ms Lam earned a reputation for being less divisive than her boss. When a China-backed election overhaul spurred student protesters to occupy swaths of the city two years ago, it was Ms Lam who met with their leaders. Although she gave no ground in the talks, she acknowledged the movement's support and avoided escalating the stand-off.

The electoral reform plan, which would let the election committee vet chief executive candidates before a public vote, is one of several Beijing-supported proposals shelved by recent administrations amid protests. Another - sweeping national security legislation to outlaw treason sedition and other national threats - has regained support after the emergence of a new, more confrontational independence movement.

While Ms Lam said the government was obligated to confront such issues, she said her priority would be bolstering economic growth and maintaining Hong Kong's position as a global financial hub. The local economy is forecast to grow 1.8 per cent this year, according to data compiled by Bloomberg. That's up from 1.5 per cent last year, but slower than in 2015.

Ms Lam said the government has been too reluctant to spend and must invest more in education and medical services. She also called for cutting red tape and taxes, saying "there are occasions where if we collect less, we gain more." "The time has come for us to take more innovative approach," Ms Lam said, citing the city's "structural surplus." "We should spend more and invest, with a view that we would grow the economy and make everyone happier." Ms Lam sought to portray herself as a woman of action, rather than talk. While she said she was enjoying the campaign trail, Ms Lam noted running for the office wasn't her first choice.

"I have to be very frank with you - I have planned my retirement," she said. Once Leung bowed out, she said, "I sort of tried to convince myself that I should put myself forward as another alternative for the voters and the people of Hong Kong."

BLOOMBERG