When China’s ruling Communist Party began preparing to take back Hong Kong from Britain, it quickly found an unlikely ally: wealthy tycoons who, terrified of communism, had long supported British colonial rule.

“Not long after arriving in Hong Kong, I realized that the political inclinations of businessmen are always connected with their business interests,” the party’s then-envoy, Xu Jiatun, recalled, recounting how he wooed “big capitalists” by making clear that they would profit from switching their loyalties to Beijing.

Today, nearly three decades later, Xu has broken with Beijing and lives in California. But the alliance he forged between Communist cadres and some of Hong Kong’s richest capitalists is still going strong. It will be on full display Sunday when a 1,193-member committee stacked with pro-Beijing plutocrats selects a new leader, or chief executive, for this Chinese-ruled metropolis of 7.1 million.

Instead of providing a stable pillar for Chinese rule, however, Hong Kong’s billionaires are fueling bitter and destabilizing division. At a time of mounting public anger here over the gap between rich and poor, tycoons once feted as exemplars of Hong Kong’s rags-to-riches spirit are today widely reviled. And, to China’s dismay, they are battling furiously among themselves over who should be chosen to lead Hong Kong for the next five years.

“Public sentiment has changed,” said Lee Cheuk-yan, a trade union leader and member of Hong Kong’s local legislature. “People don’t admire tycoons anymore but see them as symbols of greed.”

The shift, startling in a city long famous for revering wealth, has caused big problems for just about everybody at the top of Hong Kong’s political and economic system — from Donald Tsang, the outgoing chief executive, to mega-rich property developers and Communist Party officials responsible for what, since 1997, has been a Special Administrative Region of China.

With China’s own leadership transition later this year buffeted by a rift at the summit of the party after the purge last week of Bo Xilai, the “princeling” son of a revolutionary elder, the turbulence in Hong Kong ahead of the contest Sunday has added further discord and amplified demands here and in Beijing for an end to decision-making by a tiny group of insiders.

An anti-mogul tide

Hong Kong’s traditional pro-China camp — a mostly underground network of often-impecunious left-wing activists, secret party members and Chinese patriots — never much liked Beijing’s dalliance with tycoons. But, unswervingly loyal to Beijing, they bit their tongue in public.

Today, however, some of them are joining the anti-mogul tide. In a recent newspaper commentary, Lau Nai-keung, a veteran pro-China figure, poured scorn on “egocentric tycoons” and said they should “pack up and go.”

A flurry of statements in public and private by Chinese officials that Hong Kong’s next chief executive needs to be reasonably popular with the general public suggests that at least segments of the leadership in Beijing are having second thoughts about aligning so closely with unpopular business barons.

This is bad news for Henry Tang, a former civil servant from old Shanghai money who just a few months ago seemed a shoo-in as the next chief executive. Tang, backed by many of Hong Kong’s richest men, also boasted excellent ties with power brokers in Beijing: His father is an old friend of former party leader Jiang Zemin, and his wedding was attended by Xu, who at the time was the party’s plenipotentiary in Hong Kong.

Beset by scandals and widely viewed as being in the pocket of property developers, Tang is struggling to salvage a gaffe-prone campaign for the top job. Pleading for support recently on television, he insisted that, though supported by Hong Kong’s biggest property tycoons, “I am not that close with real estate developers.”

His main rival, Leung Chun-ying, a land surveyor, also has wealthy supporters and China’s blessing. He also has been tarnished by scandal and has a reputation, particularly among those who know and mistrust him, for deviousness. Many believe that he is a secret member of the party, which he denies.

Leung, known as C.Y., has nonetheless managed to cast himself as a man of the people in sync with ordinary concerns. Playing on anti-tycoon sentiment, he has capitalized on the fact that his father was a police officer — not a wealthy businessman like Tang’s.

Fall from grace

When Britain ruled Hong Kong, local billionaires had the status of folk heroes. Li Ka-shing, one of the first ethnic Chinese businessmen to muscle his way into a previously British-dominated business elite, was known as “Superman.” Li, a big backer of Tang and a member of the selection committee that meets Sunday, has since grown much richer and was recently ranked Asia’s richest person by Forbes magazine, with a net worth estimated at more than $25 billion.

But, like many of his fellow moguls, he has lost most of his support among ordinary people angry over what they see as a rigged system riddled with cartels and cozy ties between government and business.

Tang, the struggling chief executive candidate, has been constantly ridiculed for a remark he made last year in response to protesters denouncing the privileges of the super-rich. (He told them to stop complaining and ask themselves: “Why can’t I become the next Li Ka-shing?”)

“People used to admire and wanted to be like tycoons, but now there is no way you can be like them,” said Michael Chugani, a political commentator and host of a weekly television interview show. “A handful of people control big property, the big supermarkets, the two drugstore chains, the mobile phone companies. . . . Tycoons are seen as crooks, and the government is seen as being in bed with them.”

Hong Kongers reacted with fury last month when local media revealed that Tsang, the chief executive, had secured a bargain rental deal for a penthouse apartment just across the border in the Chinese city of Shenzhen and had palled around with tycoons on their luxury yachts and private planes. Summoned by legislators to explain himself, Tsang offered an abject apology. An opinion poll found that three-quarters of those surveyed had lost faith in the chief executive, also the son of a colonial-era police officer.

Economic polarization

On the surface, Hong Kong is booming. Its economy grew by 5 percent last year, and unemployment stands at just over 3 percent. But although the number of registered private jets at Hong Kong’s airport has risen from two to 50 since China took over and high-end boutiques are packed with wealthy shoppers from the mainland, nearly a fifth of the population lives beneath the poverty line.

The city, according to a recent report by Morgan Stanley, has become increasingly polarized economically, with “a higher percentage of households in the lowest and highest brackets and lower portion in the middle currently, compared with in 1996,” the last full year of British rule.

The selection of a new chief executive through a process in which only .0168 percent of the population gets a vote has intensified a feeling that “the whole system stinks,” Chugani said. And the nearly 1,200 people who do get to vote are so bitterly divided that the ballot Sunday might not produce a winner, which would force a new contest, possibly with new candidates, in May. (Beijing has pledged to allow a real election by popular vote in 2017.)

Even some stalwart pro-China politicians worry that the race between Tang and Leung (and a third candidate who doesn’t stand a chance because he’s loathed by China) has become a battle between feuding, wealthy elites lined up behind one or the other of the two main candidates.

“They represent very powerful camps with lots of interests,” said Tsang Yok-sing, who heads the legislature and who, unlike business barons, supported China long before it became profitable. “I’m still ignorant of most of these interests — and I don’t want to find out.”