The three-day visit is Xi's first since becoming leader in 2013 and comes at a time when there are growing fears that Beijing is threatening semi-autonomous Hong Kong's freedoms.
High-profile pro-democracy campaigners including Joshua Wong and young legislator Nathan Law were arrested Wednesday night for causing "public nuisance" after staging a protest outside the convention centre that will host some of the anniversary events, a stone's throw away from the hotel where Xi will be staying.
More than 20 activists remained in custody Thursday morning as supporters gathered at the police station where they were being held.
"They want to prevent people like Joshua Wong and Nathan Law from going onto the streets," said fellow activist Derek Lam who was among supporters waiting outside.
The area around the convention centre has been cordoned off by giant water-filled barricades and police have said they are taking "counter terrorism security measures" to ensure Xi's safety.
Animosity towards Beijing has grown in recent years, particularly among young people.
The failure of mass rallies in 2014 to win democratic reform has sparked a new wave of "localist" activists, keen to emphasise Hong Kong's own identity, with some calling for a full split from the mainland.
Since the return to China in 1997, the city has been governed under a "one country, two systems" deal that gives it rights unseen on the mainland, including freedom of speech and an independent judiciary.
But there are now concerns Beijing is trampling the agreement by interfering in a range of areas, from politics to education and media.
Chinese authorities and local officials insist Hong Kong's semi-autonomous status is intact, but have railed against calls for self-determination or independence.
Party atmosphere
Although young activists have promised to continue protesting during Xi's visit, other residents said they would celebrate his trip to Hong Kong.
Stages were set up in squares opposite the convention centre for music and dancing with excited crowds gathering ahead of his arrival.
"It should be an honour to get the number one person in China to come to a very small city," said one 38-year-old man at the gathering who gave his name as Mr Fan.
"He's offered three days to Hong Kong -- it's a luxury," he added, saying that things were better in the city than under British rule.
Xi's visit will culminate in the inauguration of new city leader Carrie Lam, who was appointed by a pro-China committee.
She has promised to heal divisions but has already alarmed critics by saying children should be instilled with Chinese identity from a young age and suggesting that independence activists could face punishment under the law.
A Beijing-backed framework for what would have been the city's first public leadership election sparked the protests of 2014 after it said candidates must be vetted.
Since then, the debate on promised democratic reforms has stalled with Lam saying she is unsure the time is right to revisit it.
Lam has said she wants to focus on livelihood issues instead, in a city where the wealth gap is at a record high and many cannot afford decent housing, fuelling tensions.
Xi is due to fly out of Hong Kong on Saturday, after Lam's inauguration.
Eyewitness? Submit your stories now via social or:
Email: news@pulselive.co.ke
