Low tax, high wealth gap

An estimated 25,000 people took to the streets of Hong Kong over the suspected murder of Chinese dissident Li by Chinese officers in June, while around 200,000 people showed up on June 4 for a candlelight vigil to commemorate those killed in 1989.

Praised as one of the world's freest and simplest, low-tax havens for conducting business and a gateway to China, Hong Kong has nevertheless struggled over the past 15 years.

This year saw a fraught, mud-slinging electoral race for the city's top job that was eventually won by Leung, who now faces a damaging scandal over illegal constructions in a luxury villa that has corroded public trust, an infraction that had earlier torpedoed the chances of his election rival, tycoon Henry Tang.

Hong Kong's wealth gap has also widened to its worst level since the handover - while air pollution, high property prices, and anti-corruption probes into former and current senior officials' links to tycoons have stoked public frustration.

"Clearly there has developed an over-cozy, even incestuous relationship between top officials and big business," said Regina Ip, a lawmaker and former senior government official.

China again proffered a raft of economic goodies on Hong Kong to coincide with Hu's visit, but public "negative" feelings towards the Chinese government are at a record high, according to a recent University of Hong Kong poll.

The gulf in freedoms between Hong Kong and China remains stark since the territory returned to Chinese rule, with some residents taken aback by images of Hu attending a military parade at a Hong Kong People's Liberation Army barracks on Friday as thousands of soldiers assembled before tanks and defence hardware, hailed their leader.

During a visit to a cruise terminal construction site built on Hong Kong's old Kai Tak airport runway, Hu, in a hard-hat, was asked by a reporter to explain the June 4 killings.

"I hoped to ask him questions that Hong Kong people really want to ask," said Rex Hon, the reporter, who was interrogated by Hong Kong police officers for 15 minutes after his unscripted outburst. Hu ignored the question.

Leung, 57, a Beijing-backed surveyor and son of a policeman, succeeds the bow-tie wearing Donald Tsang as chief executive.

Leung's popularity, howver, has been hit by the housing scandal and the closeness of his ties to Beijing, analysts say.

Unlike Hong Kong's first post-1997 leader, Tung Chee-hwa, a shipping tycoon, and Tsang, a lifelong civil servant, Leung is a self-made millionaire who has championed grassroots causes such as poverty alleviation and building more public housing.

The opposition democrats, however, see Leung - dubbed "the wolf" for his abrasive style - with distrust and remain sceptical that he will act in Hong Kong's best interests, particularly in moving the city towards full democracy.

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