Hong Kong chooses new Beijing-backed leader amid political tension

James Pomfret and Venus Wu

* Beijing-backed Carrie Lam becomes first female leader of

HK

* Activists decry China "interference" in leadership race

* Political tension roils public, weighs on economy

(Recasts with details of winner)

HONG KONG, March 26 (Reuters) - A Beijing-backed civil

servant, Carrie Lam, was chosen to be Hong Kong's next leader on

Sunday amid accusations that Beijing is meddling and denying the

financial hub a more populist leader perhaps better able to

defuse political tension.

The majority of the China-ruled city's 7.3 million people

have no say in deciding their leader, who is chosen from among

several candidates by a 1,200-person "election committee"

stacked with pro-Beijing and pro-establishment loyalists.

Lam, who will become Hong Kong's first female chief

executive when she takes office on July 1, won 777 votes

compared with 365 for her closest rival, former financial

secretary John Tsang, who polls show is more popular.

A third candidate, retired judge Woo Kwok-hing, got 21

votes.

Some scuffles broke out outside the voting centre between

protesters and a large contingent of police, who used metal

barricades to keep the demonstrations well away.

The activists denounced Beijing's "interference" amid

widespread reports of unprecedented lobbying of voters to back

Lam, rather than Tsang, chanting "I want universal suffrage"

when the result was announced.

"Lies, coercion, whitewash," read one banner. A big yellow

banner calling for full democracy was hung from the Lion Rock

peak overlooking the city.

"The central government has intervened again and again,"

said Carmen Tong, a 20-year-old student. "It's very unjust."

Hundreds of Lam supporters waved China flags and cheered

inside and outside the venue after Lam's win.

Since Hong Kong returned to Chinese rule in 1997, Beijing

has gradually increased control over it even though China had

promised wide-ranging freedoms and autonomy not allowed on the

mainland under the formula of "one country, two systems", along

with an undated promise of universal suffrage.

Many, including opposition democrats, fear Lam will continue

the tough policies of staunchly pro-Beijing incumbent Leung

Chun-ying, a controversial figure who ordered the firing of tear

gas on pro-democracy protesters in 2014 and who was not seen to

be defending Hong Kong's autonomy and core values.

"She doesn't have a strong foundation, nor will she have a

honeymoon after she's elected," said political scientist Ivan

Choy.

"But whether she will further divide society we still have

to wait and see what she does, whether she will continue the

approach of Leung."

NEW GENERATATION

All of Hong Kong's three other post-handover leaders have

struggled to balance the demands of China's stability-obsessed

Communist Party leaders, with wish of many residents to preserve

the global financial hub's liberal values and rule of law that

have long underpinned its economic success.

In late 2014, parts of the city were paralysed when tens of

thousands of protesters blocked major roads for nearly three

months to demand Beijing allow the city full democracy; demands

that were ignored amid some violent clashes.

Some see China's creeping interference in many areas of the

city including business, media, politics, academia and the

judiciary as tarnishing the city's international business

allure.

The detention in 2015 of five Hong Kong booksellers who sold

material critical of Beijing also dismayed many residents.

The upheavals with Beijing over the city's autonomy and

democratic reforms - have roiled a new generation and weighed on

the city's economy, ranked 33rd globally by the World Bank in

2015. Hong Kong's richest man, Li Ka-shing, warned this week the

city couldn't afford another five years of strife.

Hong Kong had been presented with an electoral reform

package, offering the possibility of a direct vote for this

leadership race, though only of candidates essentially

pre-screened by Beijing. The reform blueprint was vetoed in 2015

by pro-democracy lawmakers as "fake" Chinese-style democracy.

Political and social divisions have led to some legislative

and policy-making paralysis and the stalling of major projects,

including a cultural hub and high-speed rail link to China.

While Hong Kong's proximity to China has been a boon,

bringing Chinese investment and spending, businesses have also

faced growing competition from mainland firms in core sectors

like services and property.

Housing prices, now among the world's highest, are widely

seen to have been pushed up by a wave of buying from rich

Chinese, intensifying anti-mainland China sentiment.

While Beijing never explicitly backed any candidate, senior

officials have stressed certain conditions must be met including

any leader having the "trust" of China's Communist leaders.

(Reporting by James Pomfret, Venus Wu and Katy Wong; Editing by

Robert Birsel)