Born in Shanghai, Tung's family moved to Hong Kong when he was ten and his father, Tung Chao Yung, went on to become a very successful entrepreneur. After the death of his father, Tung took over his father's multi-million dollar business. However, poor management and bad decisions took him to the brink of bankruptcy. Desperate for help, Tung turned to the Beijing government, which helped stabilize his business with political intervention. Thankful for rescuing his family enterprise, Tung's loyalty to the Beijing government was assured. The central government saw Tung as the ideal person to head a puppet government, mainly due to his adament loyalty. Tung won a landslide victory in the election for Chief Executive of the new government as many had expected, since the 400 voters of the electoral college were carefully chosen by the Beijing government and cannot be said to have adequately or appropriately represented the people of Hong Kong.
Following years of prosperity and promises of stability from Beijing, the people of Hong Kong had high hopes as their city transitioned from British colonial rule. However, the economy started deteriorating only a few months after Tung took power and has not recovered since. Although the economic situation was a result of a global stock market crisis and cannot be entirely considered Tung's fault (see Asian financial crisis), people started to lose faith in him and his government as jobs were lost and property values plunged.
Tung's leadership in his first five years in office was often the subject of jokes and ridicule, if not more so in his second term. He packed his cabinet with close friends and associates, regardless of their abilities. In 2003, Tung's Finance Secretary, Antony Leung, caused a scandal over the purchase of a luxury vehicle weeks prior to the introduction of a car sales tax. While failing to reprimand Leung for his behavior, Tung systematically purged high ranking officials who had years of experience in the government but did not display total obedience towards him (notably Anson Chan, the long-standing head of Hong Kong's Civil Service, who resigned in 2000). At the start of Tung's second five-year term, the majority of his cabinet were personally chosen by him, but many of them did not possess relevant qualifications or experience for their respective posts.
Efforts to introduce legislation to implement Article 23 of the Hong Kong Basic Law have resulted in concerns and hostile responses from lawyers, church groups, banks, journalists, foreign governments, and international human rights organisations. On 1 July 2003, Hong Kong's largest ever public rally consisting of approximately 500,000 people, filled the streets on Hong Kong Island and demonstrated against the introduction of the new laws. (Antony Leung resigned less than a week later.)
In an attempt to show his usefulness to the Beijing government and to prove his critics wrong, Tung came up with a long list of reform proposals during his five years in office. They included reforms in housing, finance, education, industry, labour, etc. The reforms have not been notably effective.
In April 2003, developments with the SARS epidemic further jeopardised Tung's popularity in Hong Kong: slow response (when compared to Singapore) in dealing with the crisis resulted in multiple deaths, a strained hospital service, and panic amongst the populace.
It is generally perceived that Tung's abilities as a businessman, though not yielding much success either, have not translated well into the political arena.