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Thursday, 15 February, 2001, 15:51 GMT
Hong Kong government shake-up
Hong Kong leader ung Chee-hwa
China moves to prop up Tung Chee-hwa

By Hong Kong correspondent Damian Grammaticas

China has announced the biggest shake-up to Hong Kong's government since the territory was handed back three years ago.

Beijing has approved a new deputy to the territory's chief executive, together with a new financial secretary.

Donald Tsang takes over as Hong Kong's deputy leader with a tough task ahead of him.

His appointment as the chief secretary for administration comes at a time when the one-country-two-systems model of government is under the greatest strain since the territory was returned to China.

New deputy leader, Donald Tsang.
Donald Tsang: New appointee must prioritise allegiances

Mr Tsang said he would do his utmost to safeguard Hong Kong's traditional freedoms, its respect for human rights and the rule of law.

He replaces Ansun Chan, easily the most popular figure in the goverment and viewed as the staunchest defender of Hong Kong's way of life against encroachment from Beijing.

She resigned after Beijing said she should give better support to the chief executive, Tung Chee-hwa, the man China appointed to govern Hong Kong.

Mr Tsang, a career civil servant, has been promoted from financial secretary.

His replacement in that position is Anthony Leung, the current Asia-Pacific chairman of the bank JP Morgan-Chase.

Profiles

Donald Tsang's elevation was no surprise - he helped guide Hong Kong's economy through the Asian financial crisis and the subsequent recession.

Many believe his policies were successful in mitigating the impact on Hong Kong.

Mr Tsang now faces a more difficult task, balancing the demands of Beijing with the interests of the business community and of the pro-democracy opposition parties.

Ansun Chang, former deputy leader
Ansun Chan opposed China's interference

In particular, Hong Kong faces pressure from China to restrict the activities of the Falun Gong spiritual movement, which is legal in the territory but banned on the mainland.

The new financial secretary, Anthony Leung, is only the second person to come to the job from outside the civil service.

The move involves a major reduction to his $2m a year salary.

One of his first challenges will be to reverse a decline in government revenues, perhaps by introducing new taxes.

For a newcomer to government, it will test his political skills to the extreme.

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See also:

12 Jan 01 | Asia-Pacific
Anson Chan: End of an era
27 Sep 00 | Asia-Pacific
Beijing backs troubled HK leader
11 Oct 00 | Asia-Pacific
HK leader tackles poverty
05 May 98 | Asia-Pacific
Hong Kong 'going wrong'
31 Dec 97 | Events of the year
Hong Kong handed over to China
23 Dec 98 | From Our Own Correspondent
Letter to Daniel
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