As Hong Kong Chief Executive Leung Chun-ying, aka CY Leung, delivers his swansong policy address on Wednesday, focus will turn to how his replacement deals with an increasingly assertive China.

Leung isn't expected to announce any grand measures at his annual speech, which began around 11am local time, now that he won't be seeking re-election when his term expires in March 2017. In the first half-hour of his address, the 62-year old said economic development was the key to improving people's livelihoods and stressed that there was "absolutely no room for independence or any form of separation" from the mainland.

Leung is deeply unpopular among Hong Kongers for various reasons, including his implication in a multi-million dollar scandal involving Australian firm UGL , the construction of illegal structures in his home, as well as his stance on the 2015 case of missing booksellers . A survey by the University of Hong Kong released this week showed Leung's popularity hit a new low of 37.5, well below the survey's warning level of 45.

Sinking ratings likely cost him China's endorsement and the race is now on to find a leader who can still cater to Beijing and maintain respect among locals. But that's easier said than done, political pundits say.

"It's almost an impossible job to do and remain popular," Danny Gittings, associate law professor at the Hong Kong University, told CNBC on Wednesday. "Whoever becomes chief executive is going to be under very tight constraints as China get more closely involved in decisions made by chief executives."

As a special administrative region of the mainland, Hong Kong is unable to democratically elect its own leaders,. The post of chief executive, the city's top position, must first be elected through an Election Committee and then officially appointed by China's government. Hong Kongers are able to elect members to the Election Committee but only a select few—six percent of the total electorate—are allowed to cast ballots.

Hong Kong is meant to enjoy high levels of autonomy from China under a principle known as 'One Country, Two Systems,' but a spate of recent episodes, including Beijing's interpretation of Hong Kong Basic Law in November , reflect increasing mainland interference in domestic affairs.

Candidates can be popular when they are chosen as chief executive but they rapidly lose that popularity once the job starts, Gittings noted, referring to the tricky balancing act between Chinese and Hong Kong interests required by the role.