China Trying a Softer Sell in Hong Kong: After Big Protests, Officials Hope Economic Moves Will Dampen Calls for Democracy, By John Pomfret:

China's policy, which has been sketched out in meetings with pro-China political leaders from Hong Kong, is a response to the recent demonstrations against Hong Kong's chief executive, Tung Chee-hwa, for his government's perceived mishandling of the economy and the SARS epidemic, and for his insistence on passing draft legislation known as Article 23 of the Basic Law. The measure would grant Hong Kong's government wide latitude to prosecute crimes against "national security," which is vaguely defined.

On July 1, more than 500,000 people marched against Tung, sparking China's worst crisis in Hong Kong since the territory was returned in 1997 after more than 150 years as a British colony. Following the demonstrations, two of Tung's top lieutenants -- his security and finance chiefs -- resigned and Tung promised to consult more closely with Hong Kong residents. China also quietly removed the Foreign Ministry's representative in the territory, saying that he had reached retirement age.

Fearful of alienating an already angry public, China and pro-Beijing forces in Hong Kong have been careful not to criticize the demonstrations. On Monday, Liu Yandong, the director of the United Front Work Department, which oversees the Communist Party's apparatus in Hong Kong, told Hong Kong political leaders that the demonstrators were "patriotic."

Chinese officials have told Hong Kong leaders that they fear China's chances of uniting with Taiwan have been delayed for years because of the Hong Kong demonstrations and Tung's perceived incompetence as the territory's first leader under Chinese rule, according to several participants in the meetings.

Hong Kong returned to Chinese rule under a formula known as "one country, two systems," in which China agreed to allow Hong Kong to retain its capitalist system, free press and independent judiciary for 50 years. Chinese officials had hoped to use Hong Kong as a model to entice Taiwan to reunite with the mainland....

In the two weeks following the demonstrations, 150,000 new voters registered -- one of the largest jumps since Hong Kong began experimenting with democracy during the last years of British rule. Many analysts say they believe those voters marched in the anti-government demonstrations and will vote against pro-Beijing and pro-government candidates in next year's elections no matter what the economy does.

The other problem is that Beijing's policy assumes China will be able to ride out the political tsunami without replacing Tung, who is widely seen as the focus of the protests.

"They want outspoken people to stop saying bad things about Tung," said Ma Lik, a top official of a pro-Beijing political party in Hong Kong and a member of China's National People's Congress. "But it won't work. Tung, in most people's view, is the problem."

But replacing Tung would be too big an acknowledgement to the demonstrators--and their mainlaind compatriots might get some funny ideas.