Hong Kong marks 20 years since handover to China
Xi Jinping joined a series of lavish events, including a flag-raising ceremony, amid tight police security.
But clashes have taken place between pro-democracy and pro-Beijing demonstrators close to the site, with several arrests made.
Many parts of the city were shut down as part of the security operation.
The pro-democracy party, Demosisto, said police had arrested five of its members, and four members from the League of Social Democrats.
Among those said by the group to have been arrested was Joshua Wong, the leader of the so-called umbrella protest movement.
The BBC's Hong Kong correspondent Juliana Liu said in a tweet on Saturday that there had been "lots of scuffles" between police and pro-democracy protesters.
Slammed to the ground - Juliana Liu, BBC News, Hong Kong correspondent
It was meant to be a routine demonstration by pro-democracy protesters.
The leaders of two political parties, the League of Social Democrats and Demosisto, had gathered to make their way to the square in the Wanchai district where the flag-raising ceremony was taking place. They were demanding greater voting rights for Hong Kong, as well the immediate release of the Chinese dissident Liu Xiaobo.
But without warning, scuffles began between the demonstrators and the police. Faces were slammed to the ground. And then pro-Beijing supporters turned up, waiving flags and blaring patriotic music. Each side was shouting abuse at the other.
The tussle went on for more than an hour, with it ending only after the leaders of the pro-democracy demonstration were led away by police, who called it an illegal gathering.
Meanwhile, Mr Xi has overseen the swearing in of the newly-elected chief executive of the territory, Carrie Lam, along with the rest of her cabinet. She is Hong Kong's first female leader.
In a speech on Saturday the Chinese president said Hong Kong now enjoyed more freedom than ever before, but warned against "impermissible" challenges to Beijing's authority over the city.
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"Any efforts to endanger national sovereignty, challenge the authority of the central government and the Hong Kong Basic Law, and use Hong Kong to penetrate and sabotage the mainland, cross the bottom line and are absolutely impermissible," he said in an address after the swearing in of Ms Lam.
It followed a ceremony in which the flags of China and Hong Kong were raised alongside one another to mark the 20-year anniversary of the city's handover of British rule.
On Friday, an official protest zone near the convention centre where Mr Xi was guest of honour at an anniversary banquet and variety performance was heavily patrolled, as demonstrators gathered chanting "end one-party dictatorship".
There is growing concern that the Chinese central government is undermining Hong Kong's more politically liberal traditions, despite its promise to give it a high degree of autonomy under the "one country, two systems" principle.
Democracy campaigners clashed with pro-Beijing supporters near the venue, with police separating the two sides.
Among the pro-democracy activists was Mr Wong, who earlier told demonstrators that the only person responsible for "causing a public nuisance" was "Xi Jinping".
He and 25 other activists were arrested on Wednesday for "breaking the 'public nuisance' law" after climbing into a golden sculpture of a bauhinia flower, Hong Kong's emblem.
The sculpture, which sits by the city's harbour front, was a gift from China and an iconic landmark symbolising the handover.
The demonstrators, who were demanding greater political freedoms, also called for the release of terminally ill Chinese dissident Liu Xiaobo.
Mr Wong was released on Friday morning, the political party Demosisto, founded by him and legislator Nathan Law, said in a tweet.
Police said in a statement the activists had been released on bail and must report back to police in September. They have not been charged.
Their protest was the second one this week at the monument - activists had earlier draped a large black flag over the sculpture and were stopped by police.
Read more about Hong Kong since the handover:
- Golden geese and democracy 'infections' - did predictions come true?
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- Hong Kong's hidden colonial relics
President Xi earlier on Friday inspected troops at a local garrison as part of what was described as the largest military parade in the city since its handover to China in 1997, Reuters news agency reports.
Mr Xi gave a short speech on Thursday after his arrival where he pledged Beijing's support for Hong Kong, and later met with the city's outgoing leader Leung Chun-ying and other officials.
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