Shipping tycoon set to steer ex colony to safe waters

TUNG Chee hwa's father, C.Y. Tung had a weakness. He liked buying ships

TUNG Chee hwa's father, C.Y. Tung had a weakness. He liked buying ships. So much so that even when he had built the family business, Orient Overseas, into the world's second largest shipping company, with 50 container ships and oil tankers, he still wanted more. Even when in the late 1970s shipping went into an international slump.

By the time C.Y. Tung died in 1982, the Hong Kong based firm was overstretched and overstocked and in big financial trouble. Tung Chee hwa took over the shipping company and three years later, with debts totalling over $2 billion, he faced his father's angry creditors and bankers in a room in Tokyo. There he made a solemn promise to ensure that all the debts were paid.

The man destined to become the first chief executive of Hong Kong when the red flag is raised in July 1997 kept his promise.

He settled the debts with the help of Henry Fok, a business tycoon who organised a syndicated loan of $120 million with help from his top connections in Beijing.

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This was a likely turning point in Tung's life, reshaping his view of communist China. Like so many people in Hong Kong, Tung was a refugee from mainland China. At the age of 12, he found himself fleeing with his family from their home in Shanghai as the communists took over in 1949. He owed his prosperity to capitalism.

In Hong Kong his father prospered, and extended the base of his shipping company to Taiwan, then in a state of near war with China. But when his son later needed their help, Taiwanese creditors turned their backs. Tung Chee hwa never forgot and the shipping tycoon became an outspoken supporter of Beijing policies. He already had a strong identity with his country, despite the family history."

"My father used to teach me that I'm a Chinese and should be proud of it," he has said.

His prominence in the world of big business and his intellectual gifts brought him into contact with major figures in the West. The future leader of Hong Kong is on first name terms with George Bush and US Senator Diane Feinstein, who said of him: "He's eager, affable, listens well and he's smart."

Tung, educated at Liverpool University, has a holiday home in San Francisco where he support the 49ers football team. He speaks fluent English and reads western newspapers and magazines. But three times a week, he practices tai chi, the Chinese early morning exercise done in apparent slow motion, and once a week has a teacher visit his Hong Kong office to talk about Chinese history.

His family regard him as a square. His sister Alice told a reporter: "Polo, Ralph Lauren - he has no idea what they are."

He has a reputation as a good boss, consulting workers before making company changes, and as a good son, who went to see "his mother every day after his father died. He shunned the limelight, choosing to live in an apartment in Hong Kong rather than the pagoda shaped mansion his father built.

But in the last few years he began to emerge as a political force. Governor Chris Patten chose him as a cabinet member to have access to reliable pro Beijing opinions, and China approved him as co chairman of the preparatory committee on the post handover period.

When Beijing created a 400 member committee to choose a new chief executive to succeed Mr Patten and invited candidates to come forward, the media shy Tung threw his hat in the ring, and exchanged his pinstriped suit for jeans and casual shirts to go looking for public approval in the city's housing projects.

It was a tactic straight out of American politics and it paid off. In popularity polls he soon overtook his chief rival, former Chief Just ice Ti Liang Yang, who announced his candidacy from a yacht.

In two months of campaigning Tung emerged as a consummate and even charismatic politician, giving Clinton like double handshakes and posing with Miss Hong Kong 1996. He also expressed a straight pro Beijing line and, in turn, the Chinese government made no secret of its support. He had already been anointed in January when President Jiang Zemin singled him out for a warm and portentous handshake at a reception.

The Americans, seeing the powerful shipping magnate as someone who would ensure stability, also gave him their blessing with an equally obvious signal. When the US Assistant Secretary of State Winston Lord visited Hong Kong last week he met Tung but not the other candidates. Mr Lord praised him as a man "of great integrity, a strong individual, independent minded, surely and sincerely promoting the welfare of the people of Hong Kong".

While he is one of Beijing's top capitalists, Tung has no ambitions to bring democracy to Hong Kong. He agrees that China should dispense with Mr Patten's semi democratic assembly, and replace it with a handpicked panel.

"I would imagine during the first five years the stress would be on stability," Tung told an interviewer. Only in his second term, starting in 2002, would he review "what kind of political process we want".

Politically the 59 year old ship owner comes across as very conservative.

"I'm very cautious, taking one step at a time," he said when asked about one day advancing democracy in the former British colony.

He also unnerved some democrats by saying that those who advocated independence for Taiwan and Tibet after the British have gone would not be allowed to remain in the territory, which China has promised will retain its autonomy and capitalist system for 50 years.

He says the media should remain free but should not go stirring up "muck", and that the Communist Party should be legalised.

But the Democratic Party, the largest in Hong Kong, hopes to open a dialogue with the crewcut shipping tycoon. Unlike Chris Patten, who could not communicate in Chinese, he is, as far as Hong Kong people are concerned, one of their own, speaking fluent Cantonese as well as Mandarin Chinese, the language of Beijing.

The task now for the man who prefers quiet diplomacy to confrontation is to prove to them that he is not in thrall to Beijing and it is he who is running Hong Kong after the Union Jack is lowered.