Graphics: GT

China's central government on Thursday urged Hong Kong to focus on economic development and improve people's livelihood, as the already struggling local economy has been affected by political disputes in the past year.

The political split is believed to have resulted in the local legislature's failure on Thursday to pass a political reform proposal on universal suffrage.

The Hong Kong and Macao Affairs Office of the State Council said it hopes the regional government would promote unity, prosperity and stability in Hong Kong, while the liaison office of the central government in Hong Kong also urged the region to end partisanship and work together for a better economy and people's livelihood, reported the Xinhua News Agency.

Chief Executive Leung Chun-ying vowed at a briefing after the veto that the regional government will work to introduce policies in the coming two years that would provide better public services and economic development.

He also said he hopes all sectors of society can arrive at a consensus on social and economic issues.

Meanwhile, analysts and lawmakers said they are concerned over possible obstacles to economic development in the region as uncertainty and disputes in the political arena keep haunting Hong Kong.

"Pan-democratic lawmakers may continue to hijack government bills that would benefit the economy and people's livelihood by filibustering to stall and block them," local lawmaker Michael Tien Puk-sun told the Global Times Thursday.

Yin Hongbiao, a professor with the School of International Studies at Peking University, told the Global Times that political uncertainty may remain in Hong Kong after the veto with different sides unable to reach a consensus over conflicting opinions. Such uncertainty is very likely to have a negative impact on the local economy, as investors prefer political stability, Yin warned.

"Discussions on political reform in Hong Kong have left a great impact on social stability and have also interfered in the development of the economy. The local government has no other choice than to improve people's livelihood," Zhang Dinghuai, a professor at the Contemporary Chinese Politics Research Institute of Shenzhen University, told the Global Times.

Last year's month-long Occupy protest has left a lasting effect on Hong Kong's economy, especially on tourism, the retail business and the transportation sector with an estimated economic loss of HK$10 billion ($1.29 billion), Guo Wanda, deputy head of the Chinese Association of Hong Kong and Macao Studies, wrote on news portal china.com.cn earlier.

Retail sales during the first quarter of the year dropped 2.3 percent year-on-year, according to Hong Kong government statistics.

Wang Zhenmin, dean of Tsinghua University Law School, said Hong Kong began to turn its attention from the economy to politics in 1997 and instead could have developed more giant technology and Internet companies, reported the Hong Kong-based Ta Kung Pao.

"It was deeply involved in political disputes when other cities were rapidly developing," Wang said.

According to a report issued by the Chinese Academy of Social Sciences in May, Hong Kong has fallen behind its neighboring Chinese mainland city of Shenzhen in Guangdong Province in comprehensive economic competitiveness as the second most competitive city in China.

"The gap between Hong Kong and mainland cities is narrowing. Hong Kong should take this opportunity to cooperate with the mainland in order not to get marginalized as free trade zones are on the rise in the mainland," read the report, adding that Hong Kong should attach importance to the role of government and forge social consensus.

Catherine Wong Tsoi-lai contributed to this story