How China Holds Sway Over Who Leads Hong Kong

By Brendan ScottBrendan Scott, Robert OlsenRobert Olsen, Adrian LeungAdrian Leung and Yue QiuYue Qiu
February 28, 2017

While the race for Hong Kong’s chief executive looks a lot like any major mayoral election, the choice doesn’t rest with the city’s 3.8 million voters. It’s decided by an electoral college of 1,200 business and political elites, including nine billionaires worth more than $100 billion. China can veto any winner it doesn’t like.

The system so heavily favors China that protesters occupied large swaths of the former British colony in 2014 in a successful bid to block a proposal for direct elections using the committee to screen potential candidates. This year’s vote on March 26 may test the limits of that system. China’s apparent favorite, former Chief Secretary Carrie Lam, is facing a more popular challenger, former Financial Secretary John Tsang.

Here’s a Closer Look at How the Committee Works

1,200

3.8M

5M

7.3M

Election Committee

members

registered

voters

eligible

voters

population

300

300

300

300

Professions:

Accountants, lawyers,

teachers and others

Industries: Banking,

commercial, insurance

and financial sectors

Labor, social

services, religious

and others

Members of Hong Kong

and Chinese

political bodies

Chief executive

is elected

7.3M

population

5M

eligible voters

3.8M

registered voters

1,200

Election Committee members

300

300

Industries: Banking,

commercial,insurance

and financial sectors

Professions:

Accountants, lawyers,

teachers and others

300

300

Labor, social

services, religious

and others

Members of Hong

Kong and Chinese political bodies

Chief executive

is elected

3.8M

5M

7.3M

1,200

registered

voters

eligible

voters

population

Election Committee

members

300

300

300

300

Professions:

Accountants, lawyers,

teachers and others

Industries: Banking,

commercial, insurance

and financial sectors

Labor, social

services, religious

and others

Members of Hong Kong

and Chinese

political bodies

Chief executive

is elected

3.8M

5M

7.3M

1,200

registered

voters

eligible

voters

population

Election Committee

members

300

300

300

300

Industries: Banking,

commercial, insurance

and financial sectors

Professions:

Accountants, lawyers,

teachers and others

Labor, social

services, religious

and others

Members of Hong

Kong and Chinese

political bodies

Chief executive

is elected

The electors represent key industries, professions and social sectors selected by the British in their scramble to set up democratic institutions in advance of Hong Kong’s return to China in 1997. The privileged few—comprising 0.03 percent of registered voters—include about 300 representatives of government bodies.

This group provides China a strong base of support, since loyalists dominate the systems that put the politicians in office. Among them are 87 local representatives to China’s national legislature and top political advisory body, whose members are vetted by the ruling Communist Party.

Still, the election remains the closest thing to a public vote for an executive post in China. The government’s supporters justify the system as a bridge toward more direct elections in Hong Kong.

Electoral Influence vs. Economic Impact

Over-represented

Agriculture

and fisheries

Textiles

and manufacturing

Professional

services

Arts, culture

and education

12.5%

10%

5.9%

4.9%

5%

3%

1.2%

0.1%

Share

of GDP

Share

of vote

Under-represented

Trading

and logistics

Property

and construction

Finance

and insurance

22.2%

20.3%

17.6%

3%

3%

1.5%

Average

Government, health

and social welfare

Tourism, hotels

and catering

20.8%

19.2%

5%

4.3%

Note: GDP data does not equal 100 percent due to overlap and economic activity unrepresented on the committee

Over-represented

Agriculture

and fisheries

Textiles

and manufacturing

5%

3%

1.2%

0.1%

Share

of GDP

Share

of vote

Professional

services

Arts, culture

and education

12.5%

10%

5.9%

4.9%

Under-represented

Trading

and logistics

Property

and construction

22.2%

20.3%

3%

1.5%

Finance

and insurance

17.6%

3%

Average

Government, health

and social welfare

Tourism, hotels

and catering

20.8%

19.2%

5%

4.3%

Note: GDP data does not equal 100 percent due to overlap and economic activity unrepresented on the committee

Over-represented

Agriculture

and fisheries

Textiles

and manufacturing

Professional

services

Arts, culture

and education

12.5%

10%

5.9%

4.9%

5%

3%

1.2%

0.1%

Share

of GDP

Share

of vote

Under-represented

Trading

and logistics

Property

and construction

Finance

and insurance

22.2%

20.3%

17.6%

3%

3%

1.5%

Average

Government, health

and social welfare

Tourism, hotels

and catering

20.8%

19.2%

5%

4.3%

Note: GDP data does not equal 100 percent due to overlap and economic activity unrepresented on the committee

Over-represented

Agriculture

and fisheries

Textiles

and manufacturing

Professional

services

Arts, culture

and education

12.5%

10%

5.9%

4.9%

5%

3%

1.2%

0.1%

Share

of GDP

Share

of vote

Under-represented

Trading

and logistics

Property

and construction

Finance

and insurance

22.2%

20.3%

17.6%

3%

3%

1.5%

Average

Government, health

and social welfare

Tourism, hotels

and catering

20.8%

19.2%

5%

4.3%

Note: GDP data does not equal 100 percent due to overlap and economic activity unrepresented on the committee

The remaining 900 electors are chosen from three broad sectors: industrial, commercial and financial services; professions; and labor, social, and religious groups. While most of the seats are elected, turnout in those votes has never broken 50 percent. One-quarter of open seats were either uncontested or settled through negotiations within the subsectors.

The committee is far from “broadly representative” as required by Hong Kong law, with women comprising less than 17 percent of the 1,194 certified members. Some groups’ influence far exceeds their contributions to the Asian financial hub’s economy, while others go unrepresented.

The 154 registered voters from the fisheries and agriculture subsector, for example, have 60 seats on the committee. That’s twice as many as accounting, which has 26,000 voters. One fisheries elector told Bloomberg in 2014 that messages about China’s preferred choice were circulated in the election committee ahead of the 2012 vote, although he said he was never explicitly told who to vote for.

Homegrown Fortunes

Hong Kong

Mainland China

Macau

Other

84%

The richest Hong Kong residents on the election committee derive

of their sales from the greater China area*

1%

25%

22%

53%

54%

46%

48%

51%

Li Ka-shing

Lee Shau Kee

Henry Cheng

Net worth: $30.4Billion

$19.9B

$12.6B

9%

7%

1%

1%

21%

72%

90%

55%

44%

Lui Che-Woo

Adam Kwok

Peter Woo

$11B

$10.8B

$10.6B

3%

13%

84%

78%

22%

100%

Hui Wing Mau

Richard Li

Pollyanna Chu

$4.6B

$4.5B

$4.3B

Note: Net worth as of Feb. 24, 2017, according to the Bloomberg Billionaires Index

*Reflects most recent annual revenue of flagship companies

Hong Kong

Mainland China

Macau

Other

The richest Hong Kong residents on the

election committee derive

of their sales from the greater China area*

84%

25%

22%

53%

Li Ka-shing

Net worth: $30.4Billion

54%

46%

Lee Shau Kee

$19.9B

1%

48%

51%

Henry Cheng

$12.6B

21%

7%

72%

Lui Che-Woo

$11B

1%

90%

9%

Adam Kwok

$10.8B

1%

55%

44%

Peter Woo

$10.6B

3%

84%

13%

Richard Li

$4.6B

78%

22%

Pollyanna Chu

$4.5B

100%

Hui Wing Mau

$4.3B

Note: Net worth as of Feb. 24, 2017, according to the Bloomberg Billionaires Index

*Reflects most recent annual revenue of flagship companies

Hong Kong

Mainland China

Macau

Other

84%

The richest Hong Kong residents on the election committee derive

of their sales from the greater China area*

1%

25%

22%

53%

54%

46%

48%

51%

Li Ka-shing

Lee Shau Kee

Henry Cheng

Net worth: $30.4Billion

$19.9B

$12.6B

9%

7%

1%

1%

21%

72%

90%

55%

44%

Lui Che-Woo

Adam Kwok

Peter Woo

$11B

$10.8B

$10.6B

3%

13%

84%

78%

22%

100%

Hui Wing Mau

Richard Li

Pollyanna Chu

$4.6B

$4.5B

$4.3B

Note: Net worth as of Feb. 24, 2017, according to the Bloomberg Billionaires Index

*Reflects most recent annual revenue of flagship companies

Hong Kong

Mainland China

Macau

Other

84%

The richest Hong Kong residents on the election committee derive

of their sales from the greater China area*

1%

25%

22%

53%

54%

46%

48%

51%

Li Ka-shing

Lee Shau Kee

Henry Cheng

Net worth: $30.4Billion

$19.9B

$12.6B

9%

7%

1%

1%

21%

72%

90%

55%

44%

Lui Che-Woo

Adam Kwok

Peter Woo

$11B

$10.8B

$10.6B

3%

13%

84%

78%

22%

100%

Hui Wing Mau

Richard Li

Pollyanna Chu

$4.6B

$4.5B

$4.3B

Note: Net worth as of Feb. 24, 2017, according to the Bloomberg Billionaires Index

*Reflects most recent annual revenue of flagship companies

The system of giving votes to business interests has been blamed for perpetuating inequality and the world’s most expensive property market, with a median-income household needing almost two decades of wages to buy a home, according to consulting firm Demographia. The committee’s nine wealthiest members have about $109 billion in holdings, according to the Bloomberg Billionaires Index, or more than one-third of the city’s economic output.

Developers dominate the list of Hong Kong’s richest, with the flagship companies of five of the committee’s billionaires deriving most of their wealth from real estate in China and Hong Kong. An exception is Li Ka-shing, Hong Kong’s richest man, whose global empire-building efforts mean he gets a majority of his sales from overseas.

Tilting in China’s Favor

Other

Pro-Democracy

Pro-Establishment

What happens when everyone votes:

What happens when the committee votes:

1.1%

Albert Ho

7.2%

Henry Tang

27.1%

56.2%

42.7%

65.6%

Leung

Chun-ying

Legislative Council 2012

Chief Executive 2012

Pro-Democracy

Pro-Establishment

Other

What happens when everyone votes:

1.1%

56.2%

42.7%

Legislative Council 2012

What happens when the committee votes:

Albert Ho

7.2%

Henry

Tang

27.1%

65.6%

Leung

Chun-ying

Chief Executive 2012

Other

Pro-Democracy

Pro-Establishment

What happens when everyone votes:

What happens when the committee votes:

1.1%

Albert Ho

7.2%

Henry Tang

27.1%

56.2%

42.7%

65.6%

Leung

Chun-ying

Legislative Council 2012

Chief Executive 2012

Other

Pro-Democracy

Pro-Establishment

What happens when everyone votes:

What happens when the committee votes:

1.1%

Albert Ho

7.2%

Henry

Tang

27.1%

56.2%

42.7%

65.6%

Leung

Chun-ying

Legislative Council 2012

Chief Executive 2012

To reach the final vote, contenders must secure public nominations from 150 committee members by a March 1 deadline. While that bar is low enough to let pro-democracy groups contest the election, their candidates were both crushed in the past two campaigns.

The lopsided victories for establishment-backed candidates contrast with elections for the city’s legislature, where opposition candidates have drawn most of the overall vote. After the 2014 Occupy protests vented popular anger over the election process, the pro-democracy camp chose not to endorse a candidate this time.

Pro-Democracy Groups Gain Ground

Pro-Democracy

2012

Total 1,193

18%

210

2017

1,194

27%

325

Pro-Democracy

2012

Total 1,193

18%

210

2017

1,194

27%

325

Pro-Democracy

2012

Total 1,193

18%

210

2017

1,194

27%

325

Pro-Democracy

2012

Total 1,193

18%

210

2017

1,194

27%

325

Still, divisions in the political establishment can lead to surprises. The apparent favorite in 2012, former Chief Secretary Henry Tang, saw support collapse after a scandal over renovations to his home. He lost to Leung Chun-ying, another China-backed contender. Leung was elected with 689 votes, a number that became a derisive nickname for his lack of popular support.

Democrats could exploit a similar split this year, after securing a record 325 seats on the committee. Rather than field a candidate of their own, they helped get two others on the ballot: Tsang, the former financial secretary; and an ex-judge, Woo Kwok-hing. Tsang’s popularity makes him a wildcard in the final vote, which is anonymous.