DHAKA: Hong Kong has begun marking the 15th anniversary since its handover from UK to Chinese control.
Chinese President Hu Jintao is due to lead the main ceremony. He earlier swore in businessman CY Leung as the city`s new leader.
Thousands of protesters are expected to take to the streets later.
One of the main causes of tension is the system used to choose Hong Kong`s leader, which many residents see as designed to install Beijing`s choice.
A so-called electoral college of 1,200 business leaders and other influential citizens, mostly loyal to Beijing, chooses the leader.
At the swearing-in ceremony, Mr Hu offered "warm congratulations" to Mr Leung and his team.
He described the 15th anniversary as a "joyous occasion".
The BBC`s Juliana Liu in Hong Kong says Mr Hu`s visit has been carefully choreographed.
But on Saturday police had to shield the president from demonstrators, and they used pepper spray to disperse crowds who were demanding an investigation into the death of an activist, Li Wangyang, earlier this year.
And one local journalist confronted Mr Hu over the 1989 Tiananmen massacre of protesters.
It is a far cry from Mr Hu`s last visit five years ago, when he toured Hong Kong in a blaze of pre-Olympic glory, says our correspondent.
His arrival comes as public confidence in the Beijing government has fallen to new lows.
The people are unhappy with record property prices, an increasing wealth gap, a lack of democracy and a string of political scandals.
Hong Kong, a British colony until 1997, has a comparatively high degree of autonomy from Beijing.
But Communist leaders in Beijing have resisted public pressure for full democracy in the city.
BDST: 0947 HRS, JULY 1, 2012
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