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Angry scuffles broke out before CY Leung began his annual address, as John Sudworth reports
Hong Kong's leader CY Leung has said the need for economic growth outweighs calls for greater democracy, in his first annual policy address since last year's pro-democracy protests.
Mr Leung said Hong Kong would "degenerate into anarchy" if it gave in to demands for universal suffrage.
The speech was delayed as several pro-democracy members staged a protest in the legislature urging him to resign.
Hong Kong's pro-democracy street protests came to an end in December.
In the opening remarks of his speech to the legislative council, which was also posted online, Mr Leung said Hong Kong had to make a choice between "implementing universal suffrage and a standstill" in the economy.
He said he recognised the aspirations of the mostly student protesters who had paralysed parts of Hong Kong for more than two months last year calling for universal suffrage.
But he said they did not fully understand Hong Kong's laws, and that the territory had never been promised total political autonomy.
The reforms to take place in 2017 - under which people will be able to vote directly for the chief executive but from a list of candidates approved by Beijing - were "a big step forward for Hong Kong's democratic development".
"As we pursue democracy, we should act in accordance with the law, or Hong Kong will degenerate into anarchy," he warned.
He also promised to generate more affordable housing in Hong Kong - a major issue in the wealthy but small territory - by announcing a new subsidised housing scheme.
Analysis: John Sudworth, BBC News, Shanghai
Another day and another angry exchange - business as usual then in the acrimonious realm of Hong Kong politics.
On one side, the yellow umbrellas came out in protest, and on the other, Hong Kong's chief executive repeated his mantra; China is sovereign, the constitution is clear, there can be no public nomination of election candidates. But, he suggested, democratic reform on these terms is surely better than none at all.
The trouble is, simply dismissing his opponents as people who fail to "properly understand" the rules is not a strategy that has so far helped lift his dismal approval rating. His pan-democrats know what the basic law says about the role of the nominating committee through which Beijing exercises its veto over who can stand. They just don't like it.
There's has never really been an argument about the technicalities of the constitution, but rather, it is one about a deep political aspiration. In his annual address today, Hong Kong's chief executive once again dismissed that aspiration as futile.
Mr Leung's speech was delayed by several minutes after members of the pan-democratic bloc walked through the Legislative Council waving yellow umbrellas - a symbol of the protest movement - and banners calling for universal suffrage and for Mr Leung to resign.
Pro-democracy members Raymond Chan and Albert Chan were removed from the chamber by security guards, while about 20 others walked out.
One legislator, Albert Ho, said Mr Leung was "simply acting as a messenger for the Beijing government and Beijing authority" and not in the interests of Hong Kong's people.
China's government has said that while there will be a free vote for the leadership in 2017, there should only be two to three candidates, chosen by a pro-Beijing committee.
Last year's protesters wanted full democracy and for Mr Leung - who was himself elected by a committee of 1,200 people - to resign, but he repeatedly refused.
While tens of thousands of people took part in the initial demonstrations which paralysed parts of central Hong Kong, numbers had fallen to a few hundred - mostly students - by the time police and bailiffs dismantled the last camps in mid-December.
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