Tsang joined the colonial civil service in 1967, occupying various positions in local administration, finance and trade before he was appointed Financial Secretary of Hong Kong in 1995, becoming the first ethnic Chinese to hold the position under British administration. He continued to serve in the Hong Kong SAR government after 1997 and known for his intervention in Hong Kong’s stock market during the 1997 financial crisis. Tsang became the Chief Secretary for Administration in 2001 and ran for the Chief Executive in 2005 after incumbent Tung Chee-hwa resigned. He served the remaining term of Tung and was re-elected in 2007. He served a full five-year term until he stepped down in 2012.
Before the end of his term, Tsang was exposed by the media of various corruption allegations. He was subsequently charged by the Independent Commission Against Corruption and was found guilty of one count of misconduct in public office in February 2017, becoming the highest officeholder in Hong Kong history to be convicted.
In September 1995, Tsang was appointed Financial Secretary, becoming the first Chinese to hold the position in 150 years of colonial history. He went on to become the first Financial Secretary in the Hong Kong Special Administrative Region on 1 July 1997. Hours before the handover, he was knighted by Prince Charles at the Government House.
Tsang became known internationally for his role in defending the Hong Kong dollar‘s peg to the U.S. dollar during the Asian financial crisis in 1998 from attacks by hedge funds led by George Soros he dubbed “crocodiles” with Joseph Yam, Chief Executive of the Hong Kong Monetary Authority. Under Tsang, the government bought over $15 billion in Hong Kong stock in order to defend Hong Kong’s exchange rate and to make the government the biggest shareholder in many blue chip firms. Tsang’s action successfully led to the retreat of the hedge funds.
On 11 October 2016, the High Court, approving the Prosecutors‘ request, ruled that Tsang should face an extra count of accepting an advantage from an agent for violating the Prevention of Bribery Ordinance. After entering pleas of not guilty to all charges, his trial began before a jury on 10 January 2017. On 17 February 2017, the jury found Tsang guilty on one charge of misconduct in public office and not guilty on the second misconduct charge, but failed to reach a verdict on the count of accepting an advantage from an agent.