Hong Kong is under tight security as it mark 25 years of handover with Chinese President Xi Jinping in attendance.
This is Mr Xi’s first trip outside of mainland China since early 2020, at the start of the Covid pandemic.
He will be present as former police chief John Lee is sworn in as Hong Kong’s new chief executive.
Mr Lee replaces Carrie Lam, a contentious leader under whom Hong Kong saw huge pro-democracy protests and China’s influence grew.
The anniversary itself was often marked by protests but these have been muted since the introduction in 2020 of a security law that has stifled free speech and dissent.
Various official events celebrating the handover will be held across the city on Friday, a public holiday. They typically culminate in a firework display over Victoria Harbour.
Mr Xi’s visit this year – the first to Hong Kong since the 20th anniversary celebrations in 2017 – has led to tight security, with the city deploying plain clothes officers and “special constables” drafted from prison guards and immigration forces, reports BBC Chinese’s Martin Yip.
An Omicron outbreak earlier this year in Hong Kong fuelled doubts over whether Mr Xi, who has personally championed China’s zero Covid policy, would cancel his visit.
But he arrived in Hong Kong on Thursday via a high-speed train. He was greeted by outgoing chief executive Carrie Lam who spent her last day in office in Covid quarantine before she met Mr Xi.
He gave a brief speech saying Hong Kong had “risen from the ashes” after a series of challenges.
Although details of his itinerary have not been made public, reports said he crossed the border again to spend the night in the nearby city of Shenzhen before returning to Hong Kong on Friday, where he is expected to deliver a keynote speech.
He will also formally appoint Mr Lee, known for his tough pro-Beijing views, as chief executive.
Mr Lee had got the top job through an uncontested election – a sore point for many Hongkongers who say China has gone back on its promise to make the process fully democratic eventually.
His new 21-member cabinet, heavily staffed by pro-Beijing leaders, includes three who have been sanctioned by the US for “undermining Hong Kong’s autonomy and restricting the freedom of expression or assembly” of its people.
China’s increasing control of Hong Kong has drawn criticism from the West.
“We’re not giving up on Hong Kong,” UK PM Boris Johnson said on Friday.
“Twenty-five years ago 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 so that Hong Kong is once again run by the people of Hong Kong, for the people of Hong Kong.”
The handover from British to Chinese rule
This year’s anniversary comes as Beijing’s grip on Hong Kong has tightened, most visible perhaps in the city’s adherence to the so-called “zero Covid” strategy.
Even as much of the world opened up, Hong Kong stuck to the unyielding policy followed by mainland China to try to stamp out the virus, despite the economic toll.
In the two years since the national security law came into effect, Hong Kong’s authorities have also been increasingly cracking down on dissent. The sweeping law criminalises any activities seen as supporting secession, subversion or collusion with foreign forces, and carries a maximum sentence of life in prison.
Only Beijing-approved candidates are able to stand in local elections, many pro-democracy media outlets have closed and free speech has been curtailed.
Hong Kong was handed back from British to Chinese rule in 1997, at the end of a 99-year lease.
It was agreed that Hong Kong would be governed by a unique “one country, two systems” principle that guaranteed freedom of assembly and an independent judiciary for the next 50 years.
But critics says the national security law goes against that promise by effectively reducing Hong Kong’s judicial autonomy and allowing authorities to stamp out protest or dissent.
In a recent interview, Chris Patten, the last British governor of Hong Kong said it was “heart breaking” to see the city’s transformation.
“It’s fair to say for 10 years after 1997, maybe a bit longer, things did not go too badly wrong, but they’ve gone downhill since, partly because [Mr] Xi and his colleagues are terrified of what Hong Kong actually stands for,” he said at a press conference.
“I do believe that Hong Kong is a great city. I hope it will be a great city again.”