Hong Kong Chief Executive Donald Tsang (
Tsang, who took over the leadership last year, is expected to seek re-election in March when his current term ends. He is widely believed to be saving any bold initiatives for his campaign.
Tsang stressed pragmatism and improving people's livelihoods in his speech.
"The success of Hong Kong can be found in our pragmatism -- we did not engage in ideological debates or utopian social projects," he said, apparently referring to clamoring calls for the swift introduction of universal suffrage.
The Hong Kong and Beijing governments are determined to bring full democracy to the territory eventually in a gradual manner, he said. He did not provide more details.
Since the former British colony returned to Chinese rule in 1997, its leader has been selected by an 800-member committee, stacked with pro-Beijing figures.
Tsang was met with loud protests before he began his speech.
"Hong Kong's government is shameless," shouted lawmaker and pro-democracy activist Albert Chan (
Chan and maverick lawmaker Leung Kwok-hung (
The two were quickly kicked out of the Legislative Council.
Tsang's speech was later interrupted by several angry protesters in the council's public gallery demanding laws that ensure a minimum wage.
He proposed more solid measures to tackle the worsening smog problem in the region. Tighter controls for emissions from electricity plants are needed, he said. Owners of older vehicles are encouraged to switch to cleaner fuels with a proposed HK$3.2 billion (US$411 million) incentive plan.
He also touched on economic measures, such as letting more foreign businesses list in Hong Kong.