by Aaron Tam

Hong Kong, June 29, 2012 (AFP) - Chinese President Hu Jintao arrived in Hong Kong Friday to mark 15 years of its handover from Britain and inaugurate its new leader, at a time of record-breaking levels of discontent toward Beijing.

Hu, whose three-day visit is his last as president before a key leadership reshuffle in Beijing later this year, will preside over the inauguration of Leung Chun-ying as the city's next chief executive on Sunday.

The Chinese leader was greeted at Hong Kong's airport by dignitaries led by Donald Tsang, the outgoing chief executive after seven years in office, as well as flag-waving schoolchildren who wore red caps.

Hu said Hong Kong had achieved "significant" development since the handover on July 1, 1997, and that the "one country, two systems" model which guarantees the southern Chinese city a semi-autonomous status has been upheld.

"In the coming two days, I hope to be able to walk more, see more and personally feel the development of Hong Kong, understand the life and expectations of the Hong Kong people," Hu said.

Hu, who last visited Hong Kong in 2007 during the 10th handover anniversary, also called for unity between Hong Kongers and their northern neighbours, as the level of mistrust toward Beijing surged to a new high since the handover.

"The central government would like to use the valuable experience gained over the past 15 years with the people of all sectors in Hong Kong to unite together and look forward to further promote the practice of 'one country two systems'," the Chinese leader said.

Under the "one country, two systems" principle, Hong Kong retains its own judicial and financial frameworks, with civil liberties including the right to demonstrate and press freedom not seen on the mainland.

Despite the economic integration, discontent has been growing as Hong Kongers accuse the influx of Chinese mainlanders of taking away their limited resources, from school places and maternity beds to baby formula.

A telephone poll of over 1000 people released last week by the University of Hong Kong showed mistrust among Hong Kongers toward Beijing at a new post-handover high of 37 percent.

"There will be a tremendous dispute over the place and scope of political reform in Hong Kong," Hong Kong Institute of Education social sciences professor Sonny Lo told AFP.

Activists have complained over tight security measures put in place for Hu's visit, as tens of thousands of protesters are preparing to march on Sunday for greater democracy, accusing Beijing of interfering in local affairs.

Police have set up giant barricades, measuring over two metres high, around a posh hotel in central Hong Kong where Hu stays in anticipation of a spate of protests planned by different groups.

Pro-democracy lawmaker Lee Cheuk-yan shouted slogans urging Beijing to investigate the suspicious death of Chinese dissident Li Wangyang as Hu's convoy arrived at the hotel.

Hu's schedule in Hong Kong has not been made known, apparently due to security concerns, apart from his expected attendance at Sunday's inauguration ceremony and a variety show to celebrate anniversary of Chinese rule on Saturday.