China Drawing Up Plan to Replace Hong Kong’s Carrie Lam, Report Says

Iain Marlow and Belinda Cao
China Drawing Up Plan to Replace Hong Kong’s Carrie Lam, Report Says

(Bloomberg) -- The Chinese government is drafting a plan to replace Hong Kong’s Carrie Lam with an “interim” chief executive, the Financial Times reported, citing unidentified people briefed on the deliberations.

Lam’s successor would be installed by March, covering the remainder of her term should Chinese President Xi Jinping decide to carry out the plan, the paper cited the people as saying. Lam’s replacement wouldn’t necessarily stay on for a full five-year term afterward. Leading candidates to succeed Lam include Norman Chan, former head of the Hong Kong Monetary Authority, and Henry Tang, who has also served as the territory’s financial secretary and chief secretary for administration, the report added.

Neither Chan or Tang immediately responded to requests for comment on Wednesday. A spokesman for the Chief Executive’s Office said the office does not comment on speculation.

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“Business should not expect that the removal of Lam will end the civil unrest,” Verisk Maplecroft, a consultancy that advises businesses on political risk, said in a note on Wednesday. “No matter who the next chief executive is, the protesters will continue to demand an independent investigation into police conduct amid widespread dissatisfaction with how the authorities are managing the demonstrations.”

Lam’s introduction of legislation allowing extraditions to China sparked months of increasingly violent protests against Beijing’s tightening grip over the city, pushing the economy toward a recession. Her moves to withdraw the bill and invoke a colonial-era emergency law to ban face masks have done little to stem the unrest.

According to audio excerpts released by Reuters last month, Lam told a gathering of business people that she had caused “huge havoc,” and would quit “if I had a choice.” She subsequently told reporters that she never asked China for permission to resign over the historic unrest rocking the city.

If Lam resigns, responsibility for leading the city of 7.5 million would fall immediately to Chief Secretary for Administration Matthew Cheung, who can act as chief executive for as long as six months. Before that interim period ends, the city’s 1,200-member Election Committee comprised overwhelmingly of Beijing loyalists must meet to select a new leader.

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In 2005, Hong Kong’s first post-colonial leader, Tung Chee-hwa, resigned after mass protests forced him to withdraw China-backed national security legislation. Tung, a shipping magnate, held onto the job for more than a year after the demonstrations peaked as the party settled on a succession plan.

Opposition lawmaker Claudia Mo said last week that Lam’s resignation could help ease tensions.

“She can go, if she wants to,” Mo said in an interview. “You might say, ‘What’s the point of having Carrie Lam gone? There would just be another puppet in place.’ But at least we can have a new face, and let’s have a restart, if possible, between the government and the people.”

In her annual policy address last week, Lam tried to appease the economic concerns of poorer Hong Kong citizens with incentives for first-time home buyers and annual grants for students. Still, she didn’t make any new proposals and repeated her opposition to the protesters’ demands, including granting amnesty, an independent police inquiry and the ability to nominate and elect their own leaders.

“Heads need to roll” in order to show the administration is accountable but Lam’s removal would also carry risks for the Communist Party in Beijng, said David Zweig, an emeritus professor at the Hong Kong University of Science and Technology and director of Transnational China Consulting Ltd.

“How many cities in China may have bad situations, unemployment or difficulties particularly going forward if the U.S.-China trade war continues, China’s economy slows down, and people march,” he said. “Are they going to remove mayors? Are they going to remove officials?”

(Updates with analyst comments from fourth paragraph.)

--With assistance from Natalie Lung, Jason Scott, Blake Schmidt and Fion Li.

To contact the reporters on this story: Iain Marlow in Hong Kong at imarlow1@bloomberg.net;Belinda Cao in New York at lcao4@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Daniel Ten Kate

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