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HONG KONG, China (CNN) -- Anjali Rao: Hello welcome to Talk Asia. I'm Anjali Rao. This week, we focus on a historic election here in Hong Kong, following the incumbent Chief Executive Donald Tsang as he squares off against a rival for the first time.
Donald Tsang: People want universal suffrage as soon as possible, the question is how?
Anjali Rao: Hi Mr. Tsang.
Donald Tsang: Buckle up first.
AR: OK, sir. How do you prepare for political walkabouts like this. Is it a nerve-wrecking experience?
DT: No it isn't. I like it very much. I do it all the time. But not with the entourage of the press or with a lot of people in the electioneering office. But I've been doing it regularly, maybe about once or twice a week.
AR: You have been serving the public for the past 40 years. Something like that. Do you think that makes it easier for you to communicate with the common man?
DT: Oh, I have no problem at all with any person whether it's a kid who is 3 years old or an elderly gentleman of 90 years old. I brought up from a poor family and I have absolutely no difficulty in communicating with people who are from different walks of life. The difficulty is through talking to them finding out what exactly they want, going beyond the exchange of courtesies and that requires something from the heart.
AR: How do you convince the Hong Kong people when you are out and about that you're there fighting for them, yet you're still answerable to Beijing?
DT: Well, I'm answerable to Hong Kong people. I'm answerable to Beijing
AR: Are you serving two masters?
DT: Of course we are.
AR: That must be tough.
DT: Well, everyone, if you look carefully, you're serving your own conscience, you're serving your employer at your office, you're serving your family. Everyone has certain loyalties that you have to serve. In the case of the Chief Executive, it's even more difficult constitutionally. I have to be responsible (to) the head of my nation, the government of Beijing, and I must be responsible to the people of Hong Kong. And I have enjoyed my work for two years and for that same reason I try to fight for the continuation of my job.
AR: You are running for re-election as we speak and critics say you are all but certain to win because you've got Beijing's backing and the panel that's voting for you is mostly made up of pro-Beijingers. What do you say to those critics that say you know this isn't really a serious election?
DT: What we are trying to do is follow the constitutional framework for the election process. But I've done more than that. In other words, securing Beijing's support in the end of the day and winning the votes of the 800 delegates, that is one important thing. But there's far more, in my mind, important things to do and that's to win the hearts of 7 million people whom I'm going to serve and I've been doing this throughout the election campaign, bringing my platform to the people, explaining to them what I pledge to do and why I'm the best person to do it.
AR: The main political issue here on everyone's minds is that of universal suffrage and you said that you're going to resolve it once and for all if you are re-elected but you haven't said how?
DT: Well, I have, in fact outlined very meticulously how it would be done. First of all, in (the) summer this year I would put out a consultancy paper containing the major proposals now in the cards that people are discussing so far; are we able to achieve universal suffrage in the election of the Chief Executive and the election of our legislature. We have three months' consultation period at the end of which I hope I am able to come up with one mainstream proposal which I'm going to put to Beijing. Now, that is far more practical, pragmatic way of doing it. I'm not talking about intermediary steps, I'm talking about consultation to reach the final destination of universal suffrage and it will all be delivered within this year 2007. To me, it is more concrete than anything else. I am anxious to have this resolved during the next term if I am lucky to secure it.
AR: So there is going to be a consultation paper put together this year you'll then take it to Beijing by the end of 2007. Does that mean as far as you're concerned that the territory Hong Kong will have universal suffrage in place by 2012?
DT: We must follow what people want. If people want universal suffrage according to a certain scheme of things, particularly a certain form of universal suffrage leading up to a final date and that is the favored decision, I will put that up faithfully to the central government.
AR: Even if Beijing has already said that it might not be particularly amenable to that, would you still push it?
DT: Beijing has not said that, Beijing has not said that.
AR: If they had a problem with that would you push it?
DT: We'll we have to find out what is the consensus in Hong Kong. And we have to find that out. And I am going to do that this summer. And we must not prejudice ourselves, we must bind ourselves into (a) certain date and certain form. It's not what other people want, it's what our own people want. Once things (are) clear I will be able to follow people's views as a Chief Executive and I were re-elected and then I will put it up to Beijing.
AR: You vowed that if you are re-elected you will improve the territory's air and water quality, if you know how to do that then why haven't you already, the skies here are filthy so many days of the year?
DT: No, let's be very careful in doing this before you use adjectives like that. The sky here now is a lot brighter than it was in 1997. Now, that's a fact. The air now in terms of quality is much better than it was in 1997. It is not perfect.
AR: Why is it costing HK more than 2 billion U.S. dollars every year in lost productivity and hospital admissions?
DT: Well, if you measure in those terms it happens to each and every community for that matter. People have respiratory problems in America, Europe even in Scandinavian countries. But I'm not going to defend that, I do not want to argue, go down that route. That's unprofitable. The point here is we must improve quality of air and water and find the best means of waste disposal in a way in which it would compare favorably with the best of the developed world and that is important for what we want to achieve.
But air pollution is not a territory problem, it's a regional problem; we can clean up our own act but we must be able to convince other people in the neighborhood to do the same and we are doing that. It is not something which will happen overnight, but we must be able to mount the concerted effort between ourselves and the people of Guangdong province within a region and we have now come into agreement, we have now signed MOU to reduce pollutants by half by the year 2010.
AR: In time before all the companies start upping sticks and moving to places with cleaner air?
DT: Well, we have been the most attractive place for investment in Asia and that scenario is not likely to change. We have the freest economy in the world. We have the lowest taxation with the least government intervention in the economy. We have been appraised by most of the rating agencies as one of the most attractive places for investment. People are not moving elsewhere. If you want to invest in this part of the world -- particularly deal with the growing economy of the mainland of China -- Hong Kong is in the ideal position to do it, not anywhere else out in America or Scandinavia or South Africa.
AR: Up next, lashing out at Beijing. Protests erupted at Hong Kong's first debate for the top job.
DT: It's an experience, put it this way in that it's not a daily event or even yearly event in Asia. Not even in Europe. It has suddenly come up to be an interesting event in Hong Kong. I went through with it, I don't think I enjoyed it that much. But it is important. I use it as an opportunity to explain to the Hong Kong people through the mass media what my platform means to them at the end of the day and I'm very happy with the outcome.
AR: You're still topping the leadership polls here in Hong Kong. That's not in question. Observers of that debate said that your opponent Alan Leong made more of an impact while you seem a bit on the frazzled side.
DT: It's always like that. As a leader of Hong Kong I've been going through that past few decades in the upper echelons of government, being at the sharp end of being attacked. I'm used to that. But the important thing is not how much you attack people (but) how much you are able to persuade the people here that you are able to govern the place effectively and generate the wealth and lifestyle that they want. So it's not so much that you're able to thump the other guy, you're able to persuade the public at large.
AR: There were some protesters who also showed up at the debate. They were angry about what they saw as the erosion of press freedoms here in Hong Kong. They blame Beijing's intervention, do you think they had a point?
DT: The fact that we have a demonstration here every day, in every event demonstrates it is a free place. It is a daily event in Hong Kong.
AR: But media outlets feel they have to watch what they say, certainly, much more than prior to 1997.
DT: Who has what, sorry?
AR: If the media wants to say something against Beijing they would perhaps have to rein themselves in a lot more
DT: Do they?
DT: You open up a newspaper every day, Anjali, you would be amazed at the kind of insults at the government here and the government in Beijing. Less than the newspaper anywhere else. I don't think people here, the Hong Kong newspapers here, give them the credit.
AR: I do, they're very staid.
DT: For me, it is an open media. Look at it, it has been rated as such by any other people on Earth and I have a lot of respect for the mass media.
CNN is headquartered here. Why do they headquarter here? Because it is a free place -- they can do exactly what they want here to be a news agency. But this is not only (a) CNN station, it is a station for the region as a whole. And that to me symbolizes one important thing: freedom of the press is lively here.
Sorry I won't let you go on this -- name me any other place in Asia where the freedom of the press is freer than Hong Kong? Tell me?
AR: You are one of the few people who have the direct line to President Hu Jintao and also Premier Wen Jiabao. But we don't know much about them as people. What are they like?
DT: They are just like you and me. They are very affable people when you come to talk to them, but I don't see them as often as people think. I see my president about three or four times a year and each and every time I find that there was enormous warmth, rapport and affection from him for Hong Kong as a whole, particularly for the people of Hong Kong and I'm deeply impressed.
AR: Do you ever argue with them?
DT: Well, I will not wish to go into detail of our conversation, but the important thing is Hong Kong has full autonomy in running our economy, running our social affairs, our economic affairs, and so on. And even a whole chunk of political affairs. The only thing we have to make sure the sovereign is involved is when we change our constitution. And our constitutional arrangement and that is the only area in which they have to play an active role in Hong Kong affairs.
AR: What's harder -- dealing with Beijing or London?
DT: Well, I was in different jobs. Everyone looks at his present job as the most important, the most difficult. I do not know if I will feel the same way when I actually retire and think back to my life span. But there were exciting moments in my service in the Colonial era. But, of course, the challenge of actually in the position of Chief Executive and coming into the sharpest end in the service of Hong Kong people is a genuine challenge, day in day out.
AR: Mr. Tsang, you are a devout Catholic, you attend mass every day but we know that China has some very real problems with its Catholic population. It's been ordaining bishops over there despite not having ties to the Vatican. Do you ever bring that subject up with them?
DT: Well, I do not have the opportunity of doing that, but I am not hiding the fact that I am a devout Catholic. Even (when) I'm in the mainland I go to church every day, even (when) I'm on the mainland, I keep on doing this. And I firmly believe I will be able to see before too long the reconciliation between Vatican and my own country over this. I believe the problem we are facing should be, could be, overcome and should be overcome in the interest of Catholics throughout the world and Catholics within my country.
AR: Up next, re-visiting the old neighborhood. Hong Kong's leader discusses his childhood.
DT: I moved in here when I was 7 -- that was in 1951, when this pair of buildings were built. They were the first police married quarters for junior police officers. And my whole family stayed there in one room. Room 408 of block A of the hillside block of these two buildings. We have our own kitchen but we don't have our own bathroom or toilet. We shared (a) communal bathroom and toilets at both ends of the building. So we are sharing it with 14 other families. But we didn't feel all that deprived. There're all policeman so we grew up in very tough areas.
AR: Do you have fond memories of it, you know, living with nine other people in 300 square feet.
DT: Not only us -- there were all the other families, they were all tough kids of policemen, so what they do most of the time, for the pastime -- they fight, we fight. It was a very tough area, but it was fun.
AR: Some of these buildings, this was your stomping ground and they are going to pull these buildings down soon to make way for replica buildings. That must be very distressing to you thinking that you had such a long history here.
DT: Well, I think development must take place as we try and preserve our own lifestyle. Because in here you cannot make use of it properly, it hasn't got a toilet. Now it's sub-standard in every respect so we have to replace it with something else.
AR: I understand that your father was very strict and quite heavy-handed. How did the disciplinarian approach shape you and the way in which you've raised your own two sons?
DT: My father was not unique, these were policemen, they were tough people, they beat up their kids -- all of us do. When we go to school out of here, each one of us display all our marks. On our feet and our hands -- boys and girls exactly the same. So it's no stigma involved, being beaten up by your dad or your mom. But it was tough. But it has taught me how to behave, how to think things through, to say things carefully, how to be a responsible person. And how to work hard. And that's something I've carried with me throughout my life.
But I've learned violence doesn't do anything, anybody any good at all. So in bringing up my own kids I've never, never, never thought of hitting them or trying to beat them in any way. Not even a slap on his hand. I mean far careful -- perhaps overdoing it. I have no difficulty in teaching my sons how to behave, to think or do exactly what I want them to do -- by setting an example and so on.
AR: This year will mark a decade since Hong Kong was handed back to mainland China. How do you see that the territory has changed since 1997?
DT: Well, we have proved to the rest of the world that the principal, "One country, two systems," is working and working very well. Just look at our independent judiciary, look at our legal system. Look at our community, we have proved that we are a thriving community, economically we are successful, politically we are advancing. It's a lively community where people of all walks of life and all nationalities settle here so we have been very successful in delivering what is joint declaration and later Basic Law have pledged. And I think we can meet the celebration of the 10th anniversary with open heart and with a sense of contentment. It is a joyful occasion.
AR: What do you hope that Hong Kong will get out of your leadership?
DT: I just hope I am able to deliver not only a more prosperous Hong Kong but a more harmonious, more happy one. One which is not tempted to engage in daily debate of trivial matters, on matters important to Hong Kong people, generally. I'm hoping also if I am successful in winning another term that by the time I leave to retire that we have matters like universal suffrage removed, resolved and the air will be clearer and purer, people happier. And still a vibrant place and indisputably the premier international financial center for the East Asian time zone.
AR: Donald Tsang, thank you very much, indeed, for sparing the time to speak to us today. And that's it for this edition of Talk Asia. Our guest today has been the leader of Hong Kong, Donald Tsang. I'm Anjali Rao, I'll see you again soon.