* Leung ties success to China's 'One Belt, One Road' drive
* Address does not unveil new programmes, handouts
* Property costs must be tackled 'head-on' - Leung (Adds quotes, details from policy address)
By Clare Baldwin and Donny Kwok
HONG KONG, Jan 13 (Reuters) - Hong Kong's leader, in an annual policy address that lacked sweeping new programmes, announced steps to boost integration with China, pinning the city's future on the success of Beijing's international "One Belt, One Road" initiative.
Leung Chun-ying, who started a five-year term as chief executive in 2012, said on Wednesday Hong Kong would play a significant role in promoting the new "silk road" spreading from Western China to Central Asia and Europe.
"Hong Kong is well-positioned to capture the wealth of the Belt and Road," Leung said, adding the financial hub would create a committee to formulate policies on the initiative.
He pledged spending of HK$1.2 billion ($154.65 million) to support the push, most of that for scholarships for students from countries targetted by the programme.
He mentioned "One Belt, One Road" 40 times in his speech.
The policy address has previously been a platform for leaders in the Chinese-controlled city to hand out billions to the less-advantaged or to signal shifts in economic and other political policies.
Many Hong Kong residents are dissatisfied with Leung's administration. Four lawmakers were removed from the chamber for heckling during Wednesday's speech.
Leung, who pledged in 2012 to make housing more affordable, said Hong Kong's lack of affordable property remained a serious problem.
Prices and rents "are still beyond what people can afford, and have distorted the values of the younger generation," he said. "We should continue to tackle the housing problem head-on and must not concede."
He said about 97,100 public housing units will be built over the next five years.
In tiny Hong Kong, more than seven million people are packed into just 30 percent of the territory.
The chief executive has presided over some turbulent history as Hong Kong's relationship to Beijing is being contested. Pro-democracy protesters shut down major roads for 79 days in late 2014 and Leung's administration was accused of meddling in academic appointments at the top university.
Five Hong Kong booksellers critical of China's leaders have also gone missing, sparking concerns that they were illegally abducted by mainland Chinese agents.
Now the city's economy - whose growth is closely tied to mainland China's - is slowing.
The Hong Kong dollar's peg to the U.S. dollar has made it an increasingly expensive destination for mainland Chinese who come to shop and buy property.
The former British colony returned to China in 1997 under a "one country, two systems" formula that gives it some autonomy and a promise of eventual universal suffrage. ($1 = 7.7593 Hong Kong dollars) (Additional reporting by Greg Torode, Twinnie Siu and Farah Master; Editing by Anne Marie Roantree and Richard Borsuk)