* Leung ties success to China’s ‘One Belt, One Road’ drive
* Address does not unveil major new initiatives
* Property costs must be tackled ‘head-on’ - Leung (Adds reaction, detail)
By Clare Baldwin and Donny Kwok
HONG KONG, Jan 13 (Reuters) - Hong Kong’s leader announced steps on Wednesday to boost integration with China, pinning the city’s future on the success of Beijing’s international “One Belt, One Road” concept.
Leung Chun-ying, who started a five-year term as chief executive in 2012, said during his annual policy address that Hong Kong would play a significant role in promoting the new “silk road” spreading from Western China to Central Asia and Europe.
“Hong Kong is well-positioned to capture the wealth of the Belt and Road,” Leung said. He pledged HK$1.2 billion ($154.65 million) for the concept, mostly for scholarships for students from countries targeted by the programme.
He mentioned “One Belt, One Road” 40 times in his speech, which also boosted existing plans in other areas but lacked sweeping new initiatives.
Four lawmakers were removed for heckling Leung during his speech over a lack of substance and his failure to mention concerns over the disappearance of five Hong Kong booksellers. The five, linked to the production and sale of works critical of Beijing’s leaders, are widely feared to have been illegally abducted by mainland agents.
Leung said that any such action would be in contravention of Hong Kong’s Basic Law, or mini-constitution, and that he had raised the issue with mainland authorities.
The policy address has traditionally been a platform for leaders in the Chinese-controlled city to hand out billions to the less-advantaged or to signal shifts in economic and other political policies.
With many Hong Kong residents increasingly dissatisfied with Leung’s administration, experts expressed surprise at the dominance of ‘One Belt, One Road’ over other issues.
Pro-Beijing politician Regina Ip said Leung had “overdone it” while skirting key governance and political issues, particularly Beijing’s ties with Hong Kong, a former British colony that returned to Chinese rule in 1997 with the promise of wide-ranging autonomy.
“I think (Leung) ought to offer stronger reassurances to Hong Kong people and address the confidence issues,” she said.
James Sung, a political analyst at City University, said Leung seemed determined to show loyalty to Chinese President Xi Jinping and he doubted smaller businesses would prosper from Beijing’s initiative.
Leung later acknowledged that some residents neither understood nor were interested in “One Belt, One Road”.
One regular Hong Kong University poll ahead of the speech showed his popularity had reached an all-time low of 37.5 per cent.
Leung, who pledged in 2012 to make housing more affordable, said Hong Kong’s lack of affordable property remained a serious problem.
Prices and rents “are still beyond what people can afford, and have distorted the values of the younger generation,” he said. “We should continue to tackle the housing problem head-on and must not concede.”
He said about 97,100 public housing units will be built over the next five years. He also boosted spending on public hospitals and launched a HK$2 billion matching fund to promote innovative business start-ups.
In tiny Hong Kong, 7.2 million people are packed into just 30 percent of the territory.
Leung has presided over some turbulent history as Hong Kong’s relationship to Beijing is being contested. Pro-democracy protesters shut down major roads for 79 days in late 2014 and Leung’s administration was accused of meddling in academic appointments at the top university.
Now the city’s economy - whose growth is closely tied to mainland China’s - is slowing.
The Hong Kong dollar’s peg to the U.S. dollar has made it an increasingly expensive destination for mainland Chinese who come to shop and buy property. ($1 = HK$7.7593) (Additional reporting by Greg Torode, Twinnie Siu and Farah Master; Editing by Nick Macfie; Editing by Richard Borsuk and Nick Macfie)