Chinese President Hu Jintao swore in Hong Kong's leader for a new term on Sunday and reminded the territory that the motherland comes first, as the city embarked upon its second decade under Beijing's rule.

Some Hong Kongers celebrated the anniversary of the territory's 1997 return to Chinese rule, watching People's Liberation Army parachutists perform stunt jumps and making plans to attend a huge fireworks display this evening.

Some were indifferent. It's just another day, it's not special at all, said Lau Mo Choy, a 40-year-old valet parker.

Others voiced disappointment at the pace of democratic reforms. Thousands were expected to attend an annual democracy march through the heart of town in the afternoon.

When Britain returned Hong Kong to communist China on July 1, 1997, many feared the rights and freedoms enjoyed here would erode despite the Beijing government's guarantees of sweeping autonomy under a one country, two systems formula.

Those fears have since largely eased, and the city has thrived despite rocky patches, including the debilitating SARS epidemic and an economic slump.

Compared to 10 years ago when no one knew what to expect, things are clearer and firmer now, said bank employee Ada Yu, 36. Reunification has mostly been a good thing.

The South China Morning Post declared on Sunday that one country, two systems had been a success.

Despite all the controversy and heated debate surrounding the handover, Hong Kong's core values have remained intact. The rule of law, free speech, freedom of association and free markets have all survived, it said.

Nevertheless, Beijing has kept a tight grip on the pace of democratic reform. Hong Kong's post-handover constitution says universal suffrage is the ultimate goal, but is vague on a timetable. The national parliament has ruled out direct elections in the former colony until at least 2012.

FINAL SAY

Chinese leaders have emphasized that Beijing has the final say, and Hu reminded Hong Kong on Sunday that China comes first.

One country is a pre-requisite of two systems, he said at a ceremony to swear in Hong Kong Chief Executive Donald Tsang and his cabinet for a new five-year term.

One country means that one must uphold the power vested with the central government and China's sovereignty, unity and security.

On Saturday evening, Hu had attended a grand variety show with a distinct Chinese theme. Performers included pianist Lang Lang who played a famed socialist work, the Yellow River concerto, to a large hall packed with Hong Kong's elite.

Later, Chinese officials were present at a Buddhist bell-chiming ceremony along with chanting monks to mark the countdown to midnight, the moment Britain had handed back Hong Kong after 156 years as a colony, and to bestow peace and prosperity on the territory.

Away from the festivities, pro-democracy lawmakers gave a stinging rebuke to China's rule at midnight on the balcony of the city's historic legislature in Central district, re-enacting events of a decade ago.

We want democracy. We want democracy, they shouted to a small crowd clutching umbrellas below.

Ten years ago to the minute, many of the same people had mounted the same balcony and chanted the same slogans as Prince Charles and then Chinese president Jiang Zemin shook hands and presided over the historic handover ceremony not far away.

Democracy is not any nearer to the goals stipulated in the basic law -- universal suffrage, said veteran democracy campaigner and legislator Martin Lee. In fact it seems it is even more remote than 10 years ago.

Polls show that most Hong Kongers favor democracy as soon as possible.

In Taipei, a representative of the Falun Gong spiritual movement, which is banned on the mainland but legal in Hong Kong, said over 800 practitioners were barred from entering the city in the past week, including more than 500 who flew to Hong Kong but were turned back at the airport.

Hong Kong's immigration department could not be reached for an immediate comment, but officials in the past have declined to comment on specific cases and said the department reserves the power to decide who is allowed into the territory and who is not.

Tsang has promised to resolve the universal suffrage issue during his new term. He and his cabinet face other problems too such as worsening air pollution and a widening rich-poor gap in Asia's financial hub.

(Additional reporting by James Pomfret)

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