Thousands of pro-democracy marchers are on the streets of Hong Kong as the former British colony marks 15 years since the return to Chinese rule.
The rally takes place annually in support of human rights, but has been bolstered by anger towards Beijing.
Earlier, China's visiting President Hu Jintao swore in businessman CY Leung as the territory's new leader.
During the ceremony, a lone heckler tried to interrupt Mr Hu's speech.
On the streets outside, massive crowds beat drums and waved flags as they marched though the city to call for full democracy and express their frustration with the mainland.
One of the main complaints is that the system used to choose Hong Kong's leader is designed to install Beijing's choice.
A so-called electoral college of 1,200 business leaders and other influential citizens, mostly loyal to Beijing, selects the leader.
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"China's way of thinking is totally different from ours," 46-year-old protester Bono Lay told the Associated Press.
At the swearing-in ceremony, Mr Hu offered "warm congratulations" to the 57-year-old Mr Leung and his team and described the 15th anniversary as a "joyous occasion".
He reiterated Beijing's commitment to the "one country, two systems" policy whereby Hong Kongers are allowed many more political freedoms than Chinese people on the mainland.
Mr Hu continued the address despite an interruption by a member of the crowd, who was heard calling for a condemnation of the 1989 Tiananmen Square massacre and an end to one-party rule in China.
The man, who was a guest at the inauguration ceremony, was quickly bundled out of the harbourfront building by security.
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 officers used pepper spray to disperse crowds who were demanding an investigation into the death in China of a Tiananmen activist, Li Wangyang, last month.
Our correspondent says the expression of discontent 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.
His visit comes as public confidence in the Beijing government has fallen to a new low.
People are unhappy with record property prices, an increasing wealth gap, a lack of democracy and a string of political scandals, our correspondent says.
Hong Kong, a British colony until 1997, has a comparatively high degree of autonomy from Beijing.
But China's leaders in Beijing have resisted public pressure for full democracy in the city.
Mr Leung replaces Donald Tsang, who took office in 2005.
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