HONG KONG (AP) — Hong Kong's leader said the southern Chinese financial hub's economy is expected to grow five to six percent this year as it completes its recovery from the global financial crisis.

Donald Tsang said in his annual policy speech that the territory's economy expanded by 7.2 percent in the first half, lifted by exports and local demand, and that the latest unemployment rate is 4.2 percent — the lowest since January 2009.

But the Hong Kong chief executive warned that the exports- and services-driven economy was still vulnerable to external shocks.

"We need to guard against greater downside risks in the global economy and increased risks of asset-price bubbles in Asia resulting from the fragile recovery of the US economy and the lingering sovereign debt crisis in Europe," Tsang told legislators.

He also said he will tackle the city's rich-poor gap — one of the worst in the developed world — and expensive property prices. This wealthy city of seven million is home to some of the priciest real estate in the world.

The leader said his administration will set up a ten billion Hong Kong dollar ($1.3 billion) "Community Care Fund" to provide assistance in areas not covered by the existing welfare system. Tsang said he will raise half of the fund from the business community.

Tsang said he will pave the way for middle-class home ownership with a plan that leases 5,000 apartments to first-time buyers at a fixed rent for as many as five years, then funds part of their down payment if they want to buy the flats.

He also said he will try to provide sufficient land supply for 20,000 private apartments a year for the next ten years.

To tame real-estate speculation, the Hong Kong government will temporarily halt property investment as a criteria for immigration. Officials will also step up maintenance of older apartment buildings to extend their longevity.

Critics say the proposals don't address poverty and property prices systematically.

Opposition legislator Lee Cheuk-yan said the new charity fund is too ad hoc, urging Tsang to launch a tax credit for the poor and a government-run pension instead.

Lee said instead of offering a home ownership plan, Tsang could bring down market prices by offering subsidised housing — a move that would undercut the territory's ultra-rich property developers, whom critics accuse of inflating prices.

"It doesn't solve the problem of affordability," he said. "The policy only props up property prices and favours the developers."