VZCZCXRO3178
PP RUEHCN RUEHGH
DE RUEHHK #2399/01 1600825
ZNY CCCCC ZZH
P 090825Z JUN 06
FM AMCONSUL HONG KONG
TO RUEHC/SECSTATE WASHDC PRIORITY 7194
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 HONG KONG 002399 
 
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DEPT FOR EAP AND EAP/CM 
NSC FOR DENNIS WILDER 
 
E.O. 12958: DECL: 06/09/2031 
TAGS: PGOV PHUM PINR PREL HK CH
SUBJECT: RUMORS INTENSIFY OVER NEW CHIEF SECRETARY; SOME 
SPECULATE RAFAEL HUI WILL STAY 
 
Classified By: E/P Chief Simon Schuchat. Reasons: 1.4(b,d). 
 
¶1. (C) Summary:  The Chief Executive (CE) election is more 
than nine months away, but press speculation about 
behind-the-scenes jockeying for the Chief Secretary (CS) and 
other ministerial positions has already begun.  Many had 
predicted that John Tsang Chun-wah, Director of the CE's 
Office and close personal friend of the CE, would be promoted 
to Chief Secretary after Rafael Hui stepped down in June 
¶2007.  However, the "South China Morning Post (SCMP)" 
reported on June 8 that Donald Tsang had asked Hui to stay on 
as CS for the first two years of his next term, because 
Beijing was unenthusiastic about John Tsang, the CE's first 
choice.  One pro-Beijing interlocutor told us that John 
Tsang's background as Governor Chris Patten's private 
 
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secretary from 1995-1997 might make Beijing wary of him. 
 
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Liberal Party Chief James Tien and legislator Albert Cheng 
told us that Beijing wanted Hui to stay on the job for an 
additional two years to act as a counterweight to Donald 
Tsang.  SCMP Editor-at-large Chris Yeung said the situation 
 
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remained fluid, and he was doubtful that at this early date 
John Tsang was out of the running for the CS job or that the 
CE had asked Hui to stay on.  Yeung added that the intense 
interest in who might be the next CS stemmed from the belief 
that whoever secured that job would be well-placed to run for 
CE in 2012.  End Summary. 
 
Jockeying for New Leadership Team Begins 
---------------------------------------- 
 
¶2. (C) Although the Chief Executive (CE) election is more 
than nine months away, press speculation about jockeying for 
the Chief Secretary (CS) and other ministerial positions 
already has begun.  Most observers presume that Donald Tsang, 
who has the clear backing of Beijing, will win the CE 
election in March and begin his second term in June of next 
year.  However, Tsang has yet to announce his choice to fill 
the number two position, that of CS, in his next 
administration.  Rafael Hui, who came out of retirement to 
serve as Chief Secretary last year at the request of Tsang, 
has repeatedly said that he does not intend to serve beyond 
the CE's current term.  When John Tsang Chun-wah, a close 
personal friend of the CE, moved from Secretary for Commerce, 
Industry, and Technology to become Director of the CE's 
Office in January, many observers took it as an indication 
that he would be promoted to CS after Hui stepped down.  On 
June 8, however, the "South ChinaMorning Post (SCMP)" 
repored that Donald Tsang had asked Hui to stay on as Chief 
Secretary for the first two years of the next CE term. 
 
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According to the "SCMP," Beijing was unenthusiastic about 
Tsang's first choice, John Tsang.  Similar rumors have 
 
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surfaced in the Chinese language press as analysts try to 
predict Donald Tsang's new leadership team.  Thus far the 
CE's Office has refused comment. 
 
Rafael Hui: Counterweight to Donald Tsang 
----------------------------------------- 
 
¶3. (C) On June 8, Liberal Party Chairman James Tien opined to 
the Consul General that the "SCMP" story -- that Beijing 
preferred to have Hui remain as CS for an additional two 
years -- was accurate.  In Tien's view, the central 
government believed that Hui serves as a useful counterweight 
to Donald Tsang.  Acknowledging that Hui has not indicated 
whether he would be willing to stay on for two more years, 
Tien noted that if he did so it would be due to his 
"patriotism."  Tien added that Donald Tsang would not fight 
for John Tsang's candidacy and was more focused on holding on 
to his own job. 
 
¶4. (C) Legislator and independent democrat Albert Cheng, also 
a close personal friend of CE Donald Tsang's, told us on June 
8 that he also had heard that Beijing wanted a CS who was not 
too close to Donald Tsang and could act as a check on his 
power.  While Hui could stay on if he wanted, he clearly 
would prefer to retire after his current term.  Moreover, 
according to Cheng, Donald Tsang was unhappy with the current 
situation, feeling that Hui had too much power -- "he's a 
strong man" -- and diluted Donald Tsang's authority.  If Hui 
declined to serve another term, there would likely be two 
candidates to replace him, Financial Secretary Henry Tang or 
John Tsang.  While John Tsang is Donald Tsang's preferred 
choice and Donald "wouldn't be happy with Tang," Cheng said 
that "Henry is the one who really wants the job."  That said, 
Cheng believes that having Tang as CS might actually be good 
for Donald Tsang because "Henry is incompetent."  This would 
create a situation similar to that under former CE C.H. Tung, 
when there was no CS and all the ministers reported directly 
 
HONG KONG 00002399  002 OF 002 
 
 
to the CE.  Such a scenario would increase Donald Tsang's 
power, said Cheng.  In any event, "once the election is over 
and Donald Tsang names his new cabinet, we'll know whether he 
really has the full blessing of Beijing," (i.e. whether John 
Tsang is named CS). 
 
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John Tsang: Colonial Baggage 
---------------------------- 
 
¶5. (C) On June 8, Felix Fong, Standing Committee member of 
the Democratic Alliance for the Betterment and Progress of 
Hong Kong (DAB), opined that John Tsang's background as 
Governor Chris Patten's private secretary from 1995-1997 
might make Beijing wary of him.  And unlike Donald Tsang, 
John Tsang had not done enough to "win back the hearts of 
Beijing."  (Note: So mentioned Donald Tsang's numerous trips 
to the mainland over the past few years as evidence of the 
CE's attempts to curry favor with Beijing.  End Note.)  So 
said that he "quite liked John Tsang" and that he seemed very 
qualified for the job, but that "in this type of personnel 
matter" the final decision would be up to the CE and Beijing. 
 
"Kingmaker" 
----------- 
 
¶6. (C) On June 8, "SCMP" Editor-at-large Chris Yeung 
expressed doubt that John Tsang was out of the running as a 
CS candidate or that the CE had asked Hui to stay on more 
than nine months before Donald Tsang had even won the CE 
election.  "The situation is still fluid," said Yeung. 
Nonetheless, some groups don't want Donald Tsang to be so 
powerful and therefore don't want him to have a close 
colleague such as John Tsang in the number two position, 
opined Yeung.  Others have speculated that Beijing preferred 
Hui because he could be a counterweight to Donald Tsang and 
"keep an eye on" him.  Yeung said that talk about the next CS 
had likely intensified in recent weeks because middlemen from 
the Central Government had been floating names such as Henry 
Tang and Secretary for Education and Manpower Arthur Li as 
possible candidates for the CS job to gauge reaction.  There 
was intense interest in who might be the next CS because of 
the belief that whoever secured that job would be well-placed 
to run as CE in the 2012 election.  Naturally, said Yeung, 
Beijing, the CE, and the pro-business lobby were all busy 
promoting their preferred candidates, because everyone wanted 
to be "kingmaker." 
Cunningham