President Xi Jinping hailed China's rule over Hong Kong on Friday as he led 25th anniversary celebrations of the city's handover from Britain, insisting that democracy was flourishing despite a years-long political crackdown that has silenced dissent.

Xi's speech was the finale of a two-day victory lap aimed at celebrating the Chinese Communist Party's control over the once outspoken business hub after authorities stamped out huge democracy protests.

Since Beijing imposed a national security law on Hong Kong in 2020, opposition has been quashed and most leading pro-democracy figures have fled the country, been disqualified from office or jailed.

But Xi said Beijing had always acted "for the good of Hong Kong".

"After reuniting with the motherland, Hong Kong's people became the masters of their own city," he said. "Hong Kong's true democracy started from here."

The tightly choreographed trip is the Chinese leader's first outside of the mainland since the beginning of the Covid-19 pandemic and his first to Hong Kong since the massive protests overwhelmed the city in 2019.

Friday's ceremony included the inauguration of the city's new government, led by John Lee -- a former security chief who oversaw the police response to those demonstrations.

"After all the storms, everyone has painfully learned that Hong Kong can't fall into chaos and Hong Kong can't afford chaos," Xi said.

"It must get rid of all disturbances and focus on development."

- 'Erosion of autonomy' -

Friday marks the halfway point of the 50-year governance model agreed by Britain and China under which Hong Kong would keep autonomy and key freedoms, known as One Country, Two Systems.

The anniversary used to be a prime example of those freedoms in action.

For years after the handover hundreds of thousands of residents would take part in a march every July 1 to voice political and social grievances.

But that rally, like all other mass gatherings and protests in Hong Kong, has been banned for more than two years.

Critics, including many western powers, say Beijing has effectively torn up the promise that Hong Kong would retain its way of life after the handover.

"We made a promise to the territory and its people and we intend to keep it, doing all we can to hold China to its commitments," British Prime Minister Boris Johnson said Thursday.

The United States and Australia also issued statements timed for the anniversary criticising the erosion of freedoms while Taiwan's Premier said freedom and democracy had "vanished" in Hong Kong.

But Xi insisted that One Country, Two Systems was "a good system".

It "has no reason at all to change and it must be upheld in the long run," he said in his speech, arguing it safeguarded "the country's sovereignty, security and development interests".

- Closed loop -

China still maintains strict zero-Covid controls and Xi's visit took place under a tightly monitored "closed-loop" system to protect him.

Those coming into the president's orbit -- from the schoolchildren who welcomed him at the train station to the highest-ranking government officials -- were made to take daily PCR tests and spend days in a quarantine hotel.

Parts of the city were closed off, and media coverage was tightly restricted.

Police moved to eliminate any potential source of embarrassment during Xi's time in the city, with national security police making at least nine arrests over the past week, and many of the few remaining opposition groups saying they had been warned off protesting.

Authorities have sought to portray an image of public support for the celebrations.

The city's main newspapers ran all-red full front pages celebrating the anniversary, and pro-Beijing publications ran bumper editions full of advertisements, with the longest running to 188 pages.

Friday's celebrations began with a flag-raising ceremony at the city's Victoria Harbour, complete with a military flypast and a flotilla spraying plumes of water.

Xi was not present -- local media reported he had spent the night in the neighbouring mainland city of Shenzhen and travelled back into the city on Friday morning.

All events have been closed to the public, but some scattered groups gathered near the flag-raising ceremony to watch the flypast.

Liu, a 43-year-old restaurant worker, was among those who snapped pictures on her phone as the helicopters, trailing massive Chinese and Hong Kong flags, roared past.

"Our motherland has taken good care of us and we are thankful," she said. "I'm hopeful for the next 25 years."

In a nearby eatery, a 35-year-old tech worker surnamed Cheng said he had no special plans to mark the day.

"For me and I think some Hong Kongers, the biggest impact we feel is (Xi's) visit causing huge traffic jams everywhere."

John Lee: the former Hong Kong cop Beijing trusts is sworn in
Hong Kong (AFP) July 1, 2022 - John Lee, a former beat cop who became Hong Kong's security chief and played a key role in suppressing democracy protests, became the business hub's new leader on Friday in a ceremony overseen by Chinese President Xi Jinping.

"It is the greatest honour for me today to shoulder this historic mission given to me by the central authorities and the people of Hong Kong," Lee said in his inauguration speech, thanking Beijing for its support.

Lee, 64, was anointed as Hong Kong's next chief executive by a small committee in May, winning 99 percent of the votes in a choreographed, Beijing-blessed race in which no other candidates stood.

Xi later said Lee's government would deliver a "new chapter" for Hong Kong.

Lee's elevation caps a remarkable rise for a man whose police career lifted him from a working-class family to the upper echelons of Hong Kong's political establishment.

It also places a security official in the city's top job for the first time, a man who was pivotal in the quashing of huge democracy protests in 2019 and Beijing's subsequent political crackdown.

Insiders say Lee's unwavering commitment to that role won China's confidence at a time when other Hong Kong elite were seen as insufficiently loyal or competent.

"John Lee is the one that the central government knows the best, because he was in constant contact and interaction with the mainland," pro-establishment lawmaker and prominent business figure Michael Tien told AFP earlier this year.

Lee, who is under US sanctions, spent 35 years in the police before jumping to the government in 2012, followed by a swift rise to the top.

Law and order remained his portfolio, with him serving in the Security Bureau and then leading it before becoming the city's number two official last year.

- Flares and long hair -

Lee, a Catholic, grew up poor in Sham Shui Po -- one of wealthy Hong Kong's working-class districts -- but made his way to an elite boys' school run by Jesuits.

Peter Lai, a former banker and classmate, described him as a clever and fashionable teenager who grew long hair and wore flared trousers.

Most of his contemporaries went to university, but Lee turned down an offer to study engineering to join the police.

He later told a pro-Beijing newspaper he was motivated by being bullied by neighbourhood hooligans.

Two former classmates gave a more practical reason -- the police force offered a stable career for Lee and his pregnant wife Janet.

Lee has not spoken much about his family and has dodged questions about whether his wife and two sons still hold British nationality, something he renounced when he joined the government.

As events began on Friday morning, Lee's new social media accounts posted a picture of his wife fixing his tie, thanking her for "silently supporting me and taking care of the family over the years".

- Business acumen? -

Given his security background, it seems unlikely Lee will reverse Beijing's campaign against dissent.

Where he will enter less familiar territory is the world of business.

Hong Kong, once a vibrant, multicultural business hub, has been cut off internationally during the pandemic as it shadows Beijing's strict zero-Covid strategy.

Its economy is struggling and there has been an exodus of talent.

Danny Lau, a small business association leader, said Lee was not an ideal candidate but that he would reserve judgement.

"I hope he can consider Hong Kong's international competitiveness and does not waste time on making laws unhelpful for the city's economy," Lau told AFP.

But others say Lee's appointment confirms that China now puts Hong Kong's political security ahead of business and livelihood issues.

"In the past, China might compromise for some economic benefits," Charles Mok, a former pro-democracy lawmaker now living overseas, told AFP.

"But now it seems Beijing wants its people to feel that the world is full of threats and it's only safe to stick closely to the (Communist) Party."

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