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HONG KONG, Sept 13 (Reuters) - Embattled Hong Kong leader Carrie Lam has promised to prioritise housing and peoples livelihoods to appease deep rooted discontent about the way the Asian financial hub has been governed, as protesters gear up for fresh demonstrations.
Lam, who said she caused "unforgivable havoc" by igniting the political crisis and would quit if she had a choice, said in a Facebook post late on Thursday her government would increase the supply of housing with more policies to be announced.
While the spark for the protests that have rocked Hong Kong was a now-withdrawn extradition bill and concern Beijing was eroding civil liberties, many young prostesters are also angry at sky-high living costs and a lack of future job prospects.
Hong Kong has some of the world's most expensive real estate and many young people say the city's housing policy is unfair, benefiting the rich, while forcing them to live with their parents or rent "shoe box" apartments at exorbitant prices.
Lam's comments come as activists plan the latest in a series of protests in the former British colony, which is grappling with its biggest political crisis in decades.
The demonstrations started more than three months ago in response to an extradition bill that would allow people to be sent to mainland China for trial in Communist Party-controlled courts, but have broadened into calls for greater democracy.
On Friday, demonstrators are set to carry lanterns and form human chains on the scenic Victoria Peak, popular with mainland tour groups, and on Lion Rock, separating the New Territories from the Kowloon peninsula.
Sit-ins at shopping malls and another "stress test" of the airport are also planned over the weekend. The international airport has in recent weeks seen the blocking of access roads, street fires and vandalism of a nearby subway station.
Activists also plan to gather outside the British consulate on Sunday to demand that China honours the Sino-British Joint Declaration that was signed in 1984, laying out the former British colony's future after its handover to China in 1997.
China says Hong Kong is now its internal affair. Britain says it has a legal responsibility to ensure China abides by its obligations under the Joint Declaration.
Hong Kong returned to China under a "one country, two systems" formula that guarantees freedoms not enjoyed on the mainland, including an independent legal system.
China denies meddling and has accused the United States, Britain and others of fomenting the unrest.
Police have responded to violence with tear gas, pepper spray, rubber bullets, water cannon and baton charges, as well as firing several live shots in the air, prompting complaints of excessive force.
On Thursday Hong Kong's government rejected a warning from a Canadian think tank that the city's position as one of the world's freest economies is threatened by China's "heavy hand" as anti-government protesters gear up for fresh protests.
Hong Kong is facing its first recession in a decade as a result of the protests.
The Fraser Institute, an independent public policy research organisation, said Hong Kong was one of the most economically free jurisdictions in the world but "interference from China including the violent crackdown on pro-democracy protests - severely threatens Hong Kong's rule of law."
Hong Kong's government said the comments were "entirely ungrounded and not borne out by objective facts", with human rights and freedom fully protected, according to a statement released late on Thursday. (Writing by Farah Master; Editing by Michael Perry)