The Chinese president has sworn in the new leader of Hong Kong as the territory marks its 20th anniversary of its handover from British to Chinese rule.

President Xi Jinping warned that Beijing will not tolerate any challenge to its authority in a strongly worked speech as Carrie Lam become the semi-autonomous Chinese region's fourth chief executive.

Security was tight at the same harbour-front venue where in 1997 the last colonial governor, Chris Patten handed back the territory to Beijing during a ceremony.

Minor clashes broke out as pro-democracy activists and pro-Beijing groups taunted each other, with hundreds of police deployed on a traditional day of protest in Hong Kong.

Scores of democracy protesters were taken away by police, while several pro-China groups remained, cheering loudly and waving flags as though in victory.

"Long live China," they shouted in unison. "We support the police's law enforcement actions."

Beijing-backed civil servant Lam was chosen to be Hong Kong's next leader in March by a 1,200-person "election committee" stacked with pro-China and pro-establishment loyalists.

Upwards of 100,000 thousand protesters are expected to take to the streets for an annual march in the afternoon to mark the 20th anniversary of the handover.