Hong Kong's new leader will struggle to balance the interests of powerful tycoons with those of the people after he secured Beijing's blessing to guide the city to democratic elections in 2017, analysts said.

A 1,200-member committee stacked with pro-Beijing elites on Sunday chose former property consultant Leung Chun-ying to take over from outgoing Chief Executive Donald Tsang in July, in a vote that excluded the vast majority of Hong Kong's seven million people.

The "small-circle election" fell under the One Party, Two Systems arrangement by which China has ruled Hong Kong since its 1997 handover from Britain.

But the process was met with demonstrations and indifference from ordinary Hong Kongers who are hungry for democratic change.

Perhaps most alarmingly for Leung and his backers on the mainland, he failed to win the vote of key business leaders on the election committee, such as Asia's richest man, Li Ka-shing.

So two of the most important constituencies in Hong Kong, the people and the tycoons, appear to be at best ambivalent, and at worst hostile, toward the 57-year-old whose political cunning has earned him the nickname "the wolf".

"Most people have reservations about Leung because he has been seen as beholden to Beijing's support," Chinese University history professor Willy Lam said.

"There will also be problems because he doesn't enjoy the support of big business groups... He has to do a lot of work to conciliate the powerful elites."

Observers said that with only 61 percent of the election committee's vote -- the lowest of any chief executive since the handover -- the man commonly known as CY could not rest on his laurels.

"The immediate challenge facing Leung is daunting. He has to bridge an unprecedented political divide arising from the cut-throat race between the two pro-establishment camps," the South China Morning Post wrote in an editorial.

It noted that he received only 17.8 percent of the vote in a mock election by the University of Hong Kong on Saturday. More than half of the 223,000 voters rejected all the candidates and returned blank ballots.

"Had there been a popular vote, it would have been inconclusive," the Post said, calling Leung the "weakest leader-in-waiting" the city had seen since 1997.

Persistent rumours of secret links to the Chinese Communist Party, combined with his populist campaign rhetoric about narrowing the wealth gap and providing more public housing, have spooked members of the business community.

Li, the 83-year-old billionaire whose Cheung Kong Holdings and Hutchison Whampoa are two of Hong Kong's leading conglomerates, refused to switch support from pro-business candidate Henry Tang even after Beijing dropped Tang in favour of Leung following a string of embarrassing scandals.

As the unprecedented split in the establishment camp widened, the pro-Beijing and pro-business Liberal Party urged its 29 election committee delegates to cast blank ballots in protest.

"We expect it will be tough for (Leung) in the next five years. We believe at this stage the government needs to think how it can restore public confidence," Liberal Party chairwoman Miriam Lau said after the vote.

"We will monitor the government to ensure it does not jeopardise Hong Kong's core values, economic development, business environment and the livelihood of Hong Kong people."

City University political scientist Joseph Cheng said the southern city's increasing economic dependence on the mainland would push Leung even further into Beijing's political debt.

"So basically it will be a weaker administration, a weaker Hong Kong economy that needs more support from Beijing, and therefore he will be more subservient to Beijing's will," he said.

Perhaps Leung's most difficult challenge will be paving the way for full suffrage in the next chief executive election in 2017, as promised by Beijing.

In his victory speech, he pledged to work towards an "enhanced democracy with an open and fair election system".

"Hong Kongers are rightly sceptical that Beijing will ever allow such a thing. Mr Leung should prove them wrong," the Financial Times wrote in an editorial on Tuesday.