Hong Kong, July 01 (bdnews24.com/Reuters) - New Hong Kong leader Leung Chun-ying was sworn into office on Sunday by Chinese President Hu Jintao for a five-year term in which he will confront challenges ranging from human rights to democracy after a tumultuous year of transition and protest.

Security was tight at the same harbourfront venue where the British handed Hong Kong to back to China exactly 15 years ago, with hundreds of police, some with dogs, making a solid ring fence to ensure the isolated protests were out of sight and earshot.

"This is really taking things to the extreme," said cab driver Lee Fongshu, who was forced to drop his passenger more than half a kilometre from the inauguration venue.

"Hong Kong isn't like the United States. We don't have guns and weapons here. Surely President Hu knows Hong Kong people wish to express their views and he knows all our protests have been very peaceful."

Tens of thousands of protesters were expected to hit the streets after the ceremony over a variety of issues including perceived China meddling in Hong Kong's affairs and slowing the city's moves towards full democracy.

China has promised the direct election of Hong Kong's leader in 2017, but many are sceptical the poll will be truly democratic. Other issues angering the public include a yawning wealth gap, corruption and pollution, though Sunday's ceremony was held under a sunny, blue sky.

Hong Kong was granted wide-ranging autonomy under the deal handing the former British colony back to China in 1997, allowing a degree of protest unknown on the mainland where any sign of dissent is crushed to ensure the preservation of Communist Party rule.

On Saturday, hundreds of Hong Kong protesters clashed with police as they tried to present a 100,000-name petition to Hu to probe the suspicious death of Chinese dissident Li Wangyang in hospital.

Two protesters were arrested amid clashes with police who used pepper spray to quell the crowds outside the harbourfront convention centre.

On Sunday, a group of protesters was taken away in a police van chanting slogans celebrating the pro-democracy protests in and around Beijing's Tiananmen Square which were crushed by the military on June 4, 1989.

A truck draped with black June 4 slogans was forced away from the area closely tailed by a police motorbike.

LOW TAX, HIGH WEALTH GAP

An estimated 25,000 people took to the streets of Hong Kong over the suspected murder of Chinese dissident Li by Chinese officers in June, while around 200,000 people showed up on June 4 for a candlelight vigil to commemorate those killed in 1989.

Praised as one of the world's freest and simplest, low-tax havens for conducting business and a gateway to China, Hong Kong has nevertheless struggled over the past 15 years.

This year saw a fraught, mud-slinging electoral race for the city's top job that was eventually won by Leung, who now faces a damaging scandal over illegal constructions in a luxury villa that has corroded public trust, an infraction that had earlier torpedoed the chances of his election rival, tycoon Henry Tang.

Hong Kong's wealth gap has also widened to its worst level since the handover -- while air pollution, high property prices, and anti-corruption probes into former and current senior officials' links to tycoons have stoked public frustration.

"Clearly there has developed an over-cozy, even incestuous relationship between top officials and big business," said Regina Ip, a lawmaker and former senior government official.

China again proffered a raft of economic goodies on Hong Kong to coincide with Hu's visit, but public "negative" feelings towards the Chinese government are at a record high, according to a recent University of Hong Kong poll.

The gulf in freedoms between Hong Kong and China remains stark since the territory returned to Chinese rule, with some residents taken aback by images of Hu attending a military parade at a Hong Kong People's Liberation Army barracks on Friday as thousands of soldiers assembled before tanks and defence hardware, hailed their leader.

During a visit to a cruise terminal construction site built on Hong Kong's old Kai Tak airport runway, Hu, in a hard-hat, was asked by a reporter to explain the June 4 killings.

"I hoped to ask him questions that Hong Kong people really want to ask," said Rex Hon, the reporter, who was interrogated by Hong Kong police officers for 15 minutes after his unscripted outburst. Hu ignored the question.

Leung, 57, a Beijing-backed surveyor and son of a policeman, succeeds the bow-tie wearing Donald Tsang as chief executive.

Leung's popularity, howver, has been hit by the housing scandal and the closeness of his ties to Beijing, analysts say.

Unlike Hong Kong's first post-1997 leader, Tung Chee-hwa, a shipping tycoon, and Tsang, a lifelong civil servant, Leung is a self-made millionaire who has championed grassroots causes such as poverty alleviation and building more public housing.

The opposition democrats, however, see Leung -- dubbed "the wolf" for his abrasive style -- with distrust and remain sceptical that he will act in Hong Kong's best interests, particularly in moving the city towards full democracy.

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