Profile: Tung Chee-hwa; China's secret weapon

IT was a quintessential Great Hall of the People occasion in Peking last January. A mass of dignitaries were left shuffling their feet and self-consciously making small talk after a typically stilted group photograph with Chinese leaders.

Normally the leaders grin for the camera and then sweep out of the room. However President Jiang Zemin had a small task to perform, bestowing his blessing on the man who would be "elected" as the head of Hong Kong's first post-colonial government.

He scanned the room and finally spotted the squat figure of the 59-year- old shipping tycoon Tung Chee-hwa. With cameras in tow President Jiang greeted a broadly grinning Mr Tung with a warm handshake. Observers in Hong Kong and China understood immediately: the Chinese government was letting it be known that Mr Tung was their man.

He was the "dark horse" candidate who Chinese officials had suggested would emerge to take his place in history as the first Chief Executive of what will be known as the Special Administrative Region of Hong Kong in seven months' time.

However, Mr Tung was not keen to take on the top job. His wife, Betty, was even less keen and his three grown-up American-born children had their doubts. "I was enjoying myself. Why should I take any challenges?" he said in a local newspaper interview.

But China has a way of making offers which are hard to refuse. A decade earlier Mr Tung was in no position to turn his back on a Chinese offer, indeed it helped save his business. The shipping empire, established by his flamboyant father CY Tung, was on the verge of collapse under a sea of debt totalling $2.68bn. The bankers were about to pull the plug, the government in Taiwan, which had once been close to the Tung family, turned its back.

The Chinese government decided to secure an ally. Mr Tung has only recently admitted that $120m contributed to the bail-out came from China. At first he simply said that the money came from a group put together by Henry Fok, a Hong Kong tycoon generally regarded as being one of China's most trusted allies in the colony.

"CH is a fully-owned subsidiary of the PRC (People's Republic of China)," sniffed a senior Hong Kong civil servant. "They own him and he knows it." The relationship is not quite so simple. Mr Tung rebuilt the Orient Overseas shipping empire, albeit on a more modest scale than in his father's day when it was one of the world's largest shipping lines, and repaid the debts with plenty to spare.

He may not owe his saviours money but he does have a debt of gratitude and is conscientious about repaying such debts. He is still close to Mr Fok who helped him through his bad patch and, some would say remarkably, is on very good terms with the bankers who risked incurring a massive bad debt.

The rescue of his companies was one of the most complicated bail-outs in corporate history. Mr Tung worked the phones day and night, juggling demands from Tokyo, New York, Seoul, London and Hong Kong. No one involved in the agonising 17-month process of putting the Orient Overseas colossus back on its feet has a bad word to say about Mr Tung. Equally the bankers were very much aware that the turning point in the rescue came when word spread that Mr Tung had secured China's backing. It was not difficult for him to find common ground with his new friends. At that time the Communist Party was showing itself to be cautiously reform minded on economic matters and, after all, it was the country of his birth.

TUNG CHEE-HWA has not had to make compromises that he would consider unacceptable. China's "united front" strategy is to gather the widest possible range of allies together and gradually isolate opponents. The main united front body is the Chinese People's Consultative Conference, which Mr Tung joined in 1993.

However, his real entry to Chinese politics came a year earlier and, in retrospect, is evidence that Peking had earmarked him for greater things. It is generally known that he joined the Governor's Executive Council in 1992 but not well known that he did so after Chris Patten, then recently installed as Governor, decided to include a council member acceptable to China.

Sir David Ford, then the Chief Secretary, was delegated to sound out Chinese sources. He returned with the name of Tung Chee-hwa. It was a clever choice because Mr Tung was not publicly allied to the Chinese camp and was far from high-profile politically. In effect he was to get a crash course in government from the Brits and be China's eyes and ears in the council.

Mr Tung slipped into his new role with aplomb. He was friendly and diligent, yet firm in following the Chinese line when issues of controversy arose in the council. Other councillors respected his position and there was an absence of acrimony, despite the fact that he generally disagreed with the main policies promoted by the Governor.

Last June Mr Tung resigned from the Executive Council in a perfectly civil manner, writing to the Governor to say that he felt his duties as a member of the Preparatory Committee (the Chinese committee preparing for the transfer of sovereignty) had created an unmanageable conflict of interest. His denial that his resignation was connected with his decision to run for Chief Executive fooled no one.

From China's point of view it was important to create the illusion that the Chief Executive was going to be elected, albeit by a hand-picked 400- strong Selection Committee supposedly representing all walks of life in Hong Kong. In practice most members are big league businessmen or hard core pro-Peking politicians supplemented by a couple of mild critics.

The game plan was to have four candidates nominated by the committee and make it appear that a real election was under way until 11 December, when Mr Tung would surge through the ranks of fairly evenly matched candidates and claim the crown.

Qian Qichen, China's vice-premier and chairman of the Preparatory Committee, sternly reminded the 400 voters that "people must not think the Chief Executive has been pre-ordained". He went further, claiming that the process of selecting the new head of government marked "the real beginning of democracy in Hong Kong and not the end of democracy in Hong Kong as some people have said".

Unfortunately, the Chinese government underestimated the determination of committee members to be seen to back the winner. Instead of spreading the votes evenly between the four candidates, they eliminated one of the front runners altogether and gave Mr Tung 206 of the potential 400 nominations. The outcome on 11 December cannot be in serious doubt.

Nevertheless the farce of an election campaign is under way. Mr Tung and the two remaining candidates, the former Chief Justice Sir Ti Liang Yang and the businessman Peter Woo, are out and about on the streets going through the necessary rituals.

Mixing with the hoi polloi hascome as something of a shock to Mr Tung. At a meeting with trade unionists he was genuinely taken aback to learn that the average wage was so low. Touring one of Hong Kong's many soulless housing estates, he quickly declared that housing would be his priority.

Unlike most of Hong Kong's seriously rich people Tung Chee-hwa is no rags-to-riches millionaire. As a child in Shanghai he had a privileged upbringing, although he has said that he used to walk the last few streets to school so that his classmates would not see him arriving in the family limousine.

His father moved the family to Hong Kong a year after the 1949 Communist Revolution, when Tung Chee-hwa, the eldest son, was 12 years old. The Tungs may have lost some of their wealth in the move but they were still rich when they arrived and Chee-hwa had no experience of the losses and impoverishment which turned many other exiles into bitter anti-Communists.

Nor did he have much experience of Hong Kong in the early days. His father packed him off to Britain to study at Liverpool University, leaving him with a life-long passion for Liverpool Football Club. From Liverpool he was sent to the United States and by the time he returned to Hong Kong was far more internationally-minded than the average Hong Kong businessman. He is an avid networker and belongs to prestigious American and Japanese organisations where top executives and senior politicians exchange views.

His election campaigning has also shown that he can be equally good at mixing with other types of people. A member of the Democratic Party, which China regards as subversive, says that he was pleasantly surprised that Tung "listened carefully and was friendly".

None the less Mr Tung will toe the party line. He has recently been talking a lot about Chinese values and the need for order in society. He admires Singapore's authoritarian former prime minister Lee Kwan-yew and has a circle of business friends who have little time for democratic governments.

The intriguing, and unanswered, question is: who will China appoint to keep an eye on him? It is inconceivable that he will be allowed to operate without a political commissar. Strangely, few in Hong Kong are talking about this.