In an unprecedented public dressing- down, President Hu Jintao told beleaguered Chief Executive Tung Chee-hwa and his principal officials to examine their past inadequacies, raise their competence and improve their governance.
Hu's remarks, made during celebrations of the fifth anniversary of Macau's return to Chinese rule on Monday, stood in stark contrast to his praise for Edmund Ho, the former Portuguese colony's chief executive.
The gaming enclave's turbocharged economy has soared as Macau has dodged many of the problems that have plagued its much bigger neighbour.
Hu urged all of Hong Kong's principal officials to unite for the overall long-term interest of the city and the mainland, as well as to embrace people- based governance with a view to push for economic development and improve people's livelihood.
Critics say Hu's public reprimand is a clear indication of his mounting irritation over the Tung administration's incompetence, particularly with the Hung Hom Peninsula fiasco, the aborted listing of the world's biggest real estate investment trust, the controversy surrounding the West Kowloon cultural project, as well as internal bickering and rivalry in his cabinet as principal officials jockey to take over as the next chief executive.
Meanwhile, the Hong Kong branch of China News Service, carried a scathing article, lashing out at Tung over the Link Reit, the West Kowloon project and Hung Hom flats debacle.
"In these three issues, the government was cornered and put into a weak position," it said. "Some people politicised these economic issues and caused damage to Hong Kong society."
City University academic James Sung said the warning is a sign Tung and his team must mend their leadership errors before it is too late.
"Actually this has also shown that Hu's tolerance of the Tung government has reached its limit," he said.
"Beijing has done a lot in the past to try to help Tung resolve his governance crises, such as the veto of universal suffrage in 2007-08, the offer of the Cepa bilateral trade pact and the individual travel scheme, but Tung's governance is still a mess.
"I believe Hu is trying to exert public pressure on Tung and his team by giving them a public dressing-down. He wants to make his stance clear to all Hong Kong people and let them monitor the government altogether."
Tung, however, was in a clear minority in interpreting Hu's remarks positively, saying the president was only expressing hope the SAR government and its principal officials can perform better.
"It was not a dressing down," Tung said. "In fact, the president affirmed the work that we have done. And it is quite natural I would imagine that in any place this would happen, the president or the leader of a nation would express the hope and desire of what they would expect the team to be doing."
Nonetheless, Hu's remarks come at a time when the government is grappling with the last-minute collapse of the Link listing and the HK$40 billion West Kowloon project.
In his three-point lecture, Hu told Tung and his cabinet to improve their performance and stick to "people-based" governance.
"I hope everyone will seriously reflect on what Hong Kong has gone through in the past seven years while implementing `one country, two systems', draw conclusions from its experience and examine its inadequacies, as well as continue raising its administrative competence and standard of its governance," Hu said.
"I hope everyone will bear in mind Hong Kong's overall long-term interests, and the interests of the country, to strengthen unity and co- operation, to work together with one heart and to be supportive of each other," he added as Tung and his grim- faced cabinet stood listening.
Hu also made it clear the government should "stick to the people-based principle in pushing for economic development, improving governance and maintaining social stability". Hu, however, acknowledged that Hong Kong's development is headed in the right direction. "The central government has affirmed your work," he said.
His reprimand came in stark contrast to repeated praise for Macau's chief executive. Hu pointed out that Macau had overcome the Asian financial crisis, Sars and other challenges and showcased an economic and political success story under Ho's leadership.
Hong Kong and Macau Affairs Office deputy director Chen Zuo'er expanded on Hu's remarks, saying the president hoped the overall community will "treasure" its hard-won opportunities and better handle problems.
Tung sought to put the best face on Hu's criticism, saying people should interpret his remarks positively.
"Hong Kong is a diversified society. Whenever there is a new policy, there must be different opinions. This is very natural. Therefore, there is no governance crisis," he said in Hong Kong later on Monday. He said he will take heed of Hu's advice and try to improve his performance.
"We had a very good meeting. He was very supportive of the work we have been doing and he thought that the development in Hong Kong was positive. I feel that President Hu's advice is important. We will make every effort to do a better job."
Sung of City University warned that time is running out for Tung and his cabinet to get things right. He said Chief Secretary for Administration Donald Tsang should try to make use of the last opportunity to restore the government's credibility by handling the controversial West Kowloon project carefully. There is rising public suspicion it is being railroaded into the hands of Hong Kong's powerful developers.
"Hu has reminded Tung that his administration has failed to gain a good grasp of public opinion, resulting in a lot of policy blunders," Sung said.