Chief Executive Leung Chun-ying said today that Hong Kong’s economic and livelihood problems cannot be solved by a democratic system alone, and gave a stark warning to a “minority” group of lawmakers that their delaying tactics in the Legislative Council would hamper progress in the city. In his speech at the reception celebrating the 18th anniversary of the 1997 handover, when Hong Kong returned to Chinese rule, Leung reiterated that he would focus on tackling Hong Kong’s housing and poverty issues in the next two years before his term ends in 2017. He said efforts to resolve these problems have borne fruit in the last three years – but these inroads would be “halved” if opposition lawmakers continued their stalling tactics. The warning was in contrast to Leung’s earlier vow to build a “new relationship” with lawmakers following a failed attempt by his administration to secure approval for a Beijing-backed electoral reform package in Legco on June 18. While pan-democrats continue to push for genuine universal suffrage for the city, Leung sought to move on instead to economic matters . READ MORE: The Hong Kong reform package - how it started and how it failed “As the experience of some European democracies shows, democratic systems and procedures are no panacea for economic and livelihood issues. For nearly two of the three years since this government took office, we have spent much of our energy on constitutional reform,” he said. “Now that universal suffrage for the election of the chief executive has been rejected, the government needs the support and cooperation of the entire community if we are to boost the economy and improve the livelihood of the people of Hong Kong. “If a handful of Legco members continue to resort to filibustering in avoidance of a democratic vote, and if individual members of the public deliberately abuse administrative and judicial procedures to stall the development of our society, little can be achieved – however hard the government and the community at large may try,” he said. At the start of his speech, Leung mentioned how the “the unlawful Occupy movement , which lasted 79 days, posed sustained and serious threats to social order and the rule of law”. The pro-democracy protesters blockaded the city’s major streets and some clashed with police, testing the administration’s resolve. The chief executive thanked his cabinet, civil servants, the police and the people of Hong Kong for their support in the past year. Before the reception, a flag-raising ceremony was held at the Golden Bauhinia Square in Wan Chai at 8am – kicking off a series of events to mark the handover anniversary. Several protesters around the site of the ceremony burned pictures of Leung and a Hong Kong flag despite repeated warnings from police officers. Activist Koo Sze-yiu was taken into a police van after setting fire to the flag. Lawmaker “Long Hair” Leung Kwok-hung, who was not invited to attend today’s flag-raising ceremony and reception, marched with fellow activists from the Wan Chai MTR station to a designated site far off from the Golden Bauhinia Square. They chanted slogans like, “Leung Chun-ying, step down” and “We need genuine universal suffrage”. No confrontation occurred when they encountered a group of pro-Beijing protesters, waving national flags, on their way to the Convention and Exhibition Centre where the reception was held. Leung Kwok-hung is one of at least two pan-democratic lawmakers who were left out of today’s official celebrations. The radical pan-democrat – who has previously hurled objects and insults at Leung at official events – said he was not disappointed by being excluded, but criticised the chief executive for not allowing him to express his views at the reception. Leung Chun-ying and his cabinet members; commanders of China’s military, the People’s Liberation Army; and consular officials this morning watched the raising of the national and Hong Kong flags as a police band played the national anthem. Government helicopters carrying both flags staged a fly-by and Fire Services Department vessels in Victoria Harbour sprayed water into the air. Hong Kong’s first chief executive Tung Chee-hwa sat beside Leung, while Donald Tsang Yam-kuen, Tung’s successor and Leung’s predecessor, was not seen at the ceremony.