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China's President Xi Jinping warns Hong Kong to toe the line as he swears in first female leader, Carrie Lim

Minor scuffles broke out under a blue sky as pro-democracy activists, some with banners bearing the words "Democracy. Self determination", and pro-Beijing groups taunted each other, with hundreds of police deployed on a traditional day of protest in Hong Kong.

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Hong Kong Chief Executive Carrie Lam and Chinese President Xi Jinping walk after Lam took her oath, during the 20th anniversary of the city''s handover from British to Chinese rule, in Hong Kong, China, July 1, 2017. (Reuters)
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Chinese President Xi Jinping swore in Hong Kong's new leader on Saturday warning that Beijing will not tolerate any challenge to its authority in a strongly worded speech to mark the 20th anniversary of the former British colony's return to China.

Security was tight at the same harbour-front venue where two decades earlier, the last colonial governor, Chris Patten, tearfully handed back Hong Kong to Beijing at a rain-soaked ceremony.

"Any attempt to endanger China's sovereignty and security, challenge the power of the central government and the authority of the Basic Law of the HKSAR or use Hong Kong to carry out infiltration and sabotage activities against the mainland is an act that crosses the red line and is absolutely impermissible," Xi said.

Under Hong Kong's mini-constitution, the Basic Law, the financial hub is guaranteed its freedoms for "at least 50 years" after 1997. HKSAR stands for the Hong Kong special administrative region, which is run under a "one country, two systems" formula allowing wide-ranging autonomy.

Xi's words are his strongest yet to the world financial hub and come at a time of heightened social and political tensions and concerns over what some in Hong Kong perceive as increased meddling by Beijing in the city's affairs.

He was addressing a packed hall of dignitaries and mostly pro-Beijing establishment figures, speaking for more than 30 minutes, after swearing in Hong Kong's first female leader, Carrie Lam.

Minor scuffles broke out under a blue sky as pro-democracy activists, some with banners bearing the words "Democracy. Self determination", and pro-Beijing groups taunted each other, with hundreds of police deployed on a traditional day of protest in Hong Kong.

Scores of democracy protesters were taken away by police, while several pro-China groups remained, cheering loudly and waving flags as though in victory.

"Long live China," they shouted in unison. "We support the police's law enforcement actions."

Beijing-backed civil servant Lam was chosen to be Hong Kong's next leader in March by a 1,200-person "election committee" stacked with pro-China and pro-establishment loyalists.

[For a link to Reuters handover stories, http://reut.rs/2sje26J]

Lam, speaking in Mandarin instead of the Cantonese dialect widely used in Hong Kong, said she wanted to create a harmonious society and explore new land supply in a city where the sky-high cost of housing has also triggered discontent.

Beijing's refusal to grant universal suffrage to Hong Kong triggered nearly three months of street protests in 2014 and growing calls for independence for the city, in what many observers see as the most tumultuous post-handover period in Hong Kong .      

Upwards of 100,000 thousand protesters are expected to take to the streets for an annual march in the afternoon to mark the 20th anniversary of the handover.

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