Thursday March 10, 07:44 AM
HK leader to announce resignation

HONG KONG (Reuters) - Hong Kong's leader is expected to quit today, ending nearly eight years in office marred by huge pro-democracy demonstrations, recessions and accusations of being no more than Beijing's puppet.

The government said in a statement that Chief Executive Tung Chee-hwa would speak at a news conference at 9:30 a.m. British time. It gave no other details.

Tung, 67, is expected to say he is resigning due to ill health, but there are concerns in Hong Kong that he was fired by Chinese leaders in a violation of their promise to give the city a high degree of autonomy.

Tung, Hong Kong's first post-colonial leader, will admit some of his policies hurt some people in the territory of nearly seven million, but will also say that benefits are starting to take effect, the South China Morning Post said, quoting government sources.

Reports surfaced last week that Tung was stepping down to take up a senior post on an advisory panel in Beijing but he has refused to confirm anything, leading to worries of a power vacuum in the Asian financial hub.

The promotion would allow the unelected chief executive to make a graceful exit and save face for Beijing, which has often had to defend the former shipping tycoon it hand-picked to run the former British colony after it returned to China in 1997.

Pro-democracy activists say the circumstances surrounding his departure have been a rude reminder that Beijing calls the shots in Hong Kong and bode ill for democratic reforms in a city where residents are not allowed to elect their leader.

Tung's deputy, Chief Secretary Donald Tsang, is expected to be named acting leader until Beijing holds a limited election for the post of chief executive within six months.

But sources said Beijing has already selected Tsang to serve out the remainder of Tung's term until mid-2007. If the bespectacled civil service veteran performs well, he could be tapped for a full, five-year term thereafter.

DAMAGE CONTROL

On Saturday, Beijing will announce its decision to limit the next leader's term to two years, the Post said.

It also said Beijing had taken damage-control measures to ensure the political fallout from Tung's departure will be manageable.

Tsang has reportedly met in secret with Chinese leaders and agreed to keep any changes in the governing team to a minimum.

Some Hong Kong people celebrated when they heard of Tung's reported departure, but others have been more subdued, worried about Beijing's growing influence.

"If the next chief executive, like Mr Tung, is anointed by Beijing ...he will be just another lackey of the powers that be. The negative impact on constitutional development would be devastating, because it would be nothing but a big step backwards," pro-democracy law-maker Emily Lau wrote in a newspaper commentary earlier this week.

Analysts believe Beijing will keep Tsang on a tight leash, with little hope for any significant political reforms, let alone full democracy.

Tung's resignation is not expected to be made formal until Saturday, when he is tipped to become vice chairman of China's top advisory body, a post often reserved for retiring officials.

Tung's time in office has been marked by policy blunders, fears about the erosion of basic rights and three recessions.

Unable to vote him out of office, hundreds of thousands of people have poured into the streets demanding full democracy.

Currently, Beijing selects Hong Kong's chief executive and only half of its legislators are directly elected by the public. Pro-democracy activists and many people in the city want the right to elect all of their own leaders.