Quotes of the Day

For Hong Kong Chief Executive Tung Chee-hwa, last week's annual Policy Address should have been an opportunity to brag. The economy has revived after seven lean years and the scary days of SARS. Millions of mainland tourists are streaming across the border. And prices for property, the economy's lifeblood, have zoomed up by more than 30% in the last year. Yet last week, Tung stood at the rostrum of the Legislative Council looking like he'd rather be in the dentist's chair. "We fell short of thinking what people think and addressing people's pressing needs," he confessed, describing the failures of his own government. "These shortcomings and inadequacies have undermined [our] credibility." Near the middle of the 100-minute speech, the teleprompter went blank and Tung had to fumble for his glasses to read from his notes, looking very much like a leader who has lost his way.

One political cartoonist labeled it the "Apology Address," and Tung had several reasons for mea culpas. In a poll released ahead of the address, 65% of respondents said they had no confidence in him and many in Hong Kong believe he lost hold of the territory's rudder when Beijing stepped in nine months ago to slam the door on the possibility of direct elections of his successor in 2007. With only 30 months left—by law, he isn't permitted to seek a third consecutive term—Tung's lame-duck slide has been accompanied by a startling rise in public activism, most often against government projects, such as an ambitious plan to build the largest urban arts and cultural district in Asia within a decade. Beijing itself may have prompted or even dictated the tone of self-criticism: last month in Macau, Tung and most of his cabinet stood uncomfortably on a stage as Chinese President Hu Jintao instructed the administration to "examine its inadequacies, and continue to raise its competence." Says Dr. Li Pang-kwong, a political scientist at the city's Lingnan University: "Tung wants to limit the scope of contention for the next two years."

Hong Kong has suddenly become a highly contentious place. Twice in the past two years, 500,000 residents poured into the streets to demand greater political freedoms, such as the right to directly elect its next leader and all its legislators, an issue Tung didn't broach in his address. ("Pragmatic Hong Kong has moved on to other things," says Lau Siu-kai, Tung's chief strategist and author of last week's speech. "That's nuts," retorts Christine Loh, CEO of Civic Exchange, a progressive local think tank. "It just shows how out of touch they are.") Now, activist groups have found other causes to rally around. Last month, two major property-related plans—a private consortium's desire to demolish a never-used, seven-building public housing estate, and the Housing Authority's attempt to sell shares in the largest ever real estate investment trust—were suspended (at least temporarily) after public opposition and, in the latter case, a legal challenge. Public ire is currently being directed at a visionary scheme that could be Tung's greatest contribution to a city often derided as a cultural desert: an arts center to be built on 40 weedy hectares of reclaimed harborfront land. First introduced in Tung's 1999 policy address, and later refined with a master plan by British architect Norman Foster, the West Kowloon Cultural District is slated to include at least four museums, four performance venues, art schools, galleries and studios, all housed under a swooping, transparent canopy. The district is to be built without any outlay from the public purse. It's the kind of project a well-oiled, popular administration should be able to push through without effort.

Yet inevitably, the controversy involves money. The government plans to award the entire project—which could cost up to $6.8 billion—to a single consortium, which would build and then run the cultural facilities for 30 years. Three development groups—including a partnership of Li Ka-shing's Cheung Kong Holdings and Sun Hung Kai Properties, the city's largest developer—were shortlisted, and last month, their proposals were unveiled at an exhibit replete with detailed models and video simulators. So far, more than 60,000 people have gone to take a look. "At the end of the day, it comes down to the people's wishes," says Colin Lam, vice chairman of Henderson Land Development, one of the final three bidders. "It was bound to be political and will boil down to the dollar sign itself."

What most riles the public is that the same consortium will get a giant windfall by being allowed to build and sell retail, commercial and residential units on the site. That smacks of cozy dealings between the government and the tycoons—which Tung admitted in his speech was a cause of public concern, insisting: "We are resolutely against collusion between business and the government, and will strictly enforce our monitoring systems to eliminate any transfer of benefits." Earlier this month, the legislature voted 34-3 for a non-binding resolution against the West Kowloon plan. "Invariably, people see this as a conspiracy between the government and big business," says legislator Alan Leong, who tabled the motion.

"There is so much negative feeling that I would only give it a 40% chance of going ahead," says Professor K. C. Wong of Hong Kong University's Department of Real Estate and Construction, who has completed a financial study of the project for the legislature. Wong's calculations fill in some important gaps. While the public has been invited to give its input on the aesthetics and cultural facilities of the three competing plans, and to compare "plot ratios"—which measure how tall and dense each project will be—no disclosures have been made about the financial details: total cost, expected profits, or what amount will be devoted to the arts. Wong estimates that even after paying for all the museums and theaters, the winning developer could prance off with upwards of $6.7 billion.

The Tung administration dismisses all this as unproductive grousing. "The city has become highly politicized," says Au King-chi, the Deputy Secretary of Planning and Lands who is shepherding the project. "People are using this as a stick with which to beat the government," complains a senior in-house architect with one of the three candidates. One frustrated property tycoon, Ronnie Chan, even warned that the city "has become the most communist place in China." Les Robertson, the structural engineer for New York's World Trade Center and Hong Kong's Bank of China Tower, has signed on with Henderson. Reminiscing about the Hong Kong buildings he raised in the past with little public opposition, he looks out at the skyline from the 68th floor of a tower he worked on, lamenting, "This city has changed."

Maybe it's just become more aware. "This is what happens when a society matures," says Nick Brooke, a local property consultant and past president of Britain's Royal Institute of Chartered Surveyors. On a recent Sunday, 11-year-old Matthew Tse visited the West Kowloon exhibition with his parents and grandmother. "I like this plan," he said, pointing at one of the three models. "It has the lowest plot ratio."

• Chaim Estulin | Hong Kong
• The public is beginning to ask if the government is too close to the business community