The "one country, two systems" principle has maintained Hong Kong's prosperity and stability over the last 20 years, said Lam Cheng Yuet-ngor, Hong Kong's new chief executive, in an interview with Xinhua on Saturday.
"In the past two decades, Hong Kong has developed from a regional market with regional companies listed on the exchange for local investors and limited foreign investor involvement into an global financial center".
But he warned that Hong Kong should do more to shore up interests of national sovereignty, security and development and improve patriotic education.
Xi's remarks came after Carrie Lam, 60, was sworn-in as Hong Kong's new Chief Executive, who became the territory's first female leader.
Xi spoke in a televised address after swearing in new Hong Kong leader Carrie Lam, who is already being cast by critics as a China stooge in a city where many are angry at Beijing's tightening grip on the freedoms of its almost eight million people.
Alex Huang (黃重諺), spokesman for the Presidential Office, said that the Hong Kong and Chinese authorities should view the Hong Kong people's demand for free speech, free gathering and independent jurisdiction with a positive and open mind.
Thousands of protesters joined the rally organized by a pro-democracy coalition at its starting point in downtown Victoria Park.
Earlier Saturday, more than 20 members of the political parties League of Social Democrats and Demosisto attempted to stage a protest near the exhibition centre where Xi was due to make his speech.
Shortly before Xi greeted his soldiers, several of the most prominent faces of the city's pro-democracy movement left the police station where they had been held on Wednesday.
He also said that Hong Kong should always focus on development as the top priority.
The wave of Chinese mainland businesses that have headed south in the past 20 years, flooding Hong Kong's stock market, sending market capitalization to record highs, has led to a historic remaking of the local bourse.
Known as the "two-country system", this formula guaranteed a greater degree of autonomy for the Pearl of the East and broad rights and freedoms for its citizens for 50 years, a time in which they were also promised to provide them with a democratic system of Which he had not enjoyed under the British mandate.
He was briefed on how the Hong Kong Special Administrative Region Government, through investment in infrastructure, is enhancing its connections within the Guangdong-Hong Kong-Macao Bay Area as well as with the rest of Mainland, and on the strategy of strengthening Hong Kong as an worldwide and regional logistics hub.
"Vancouver is one of the main places that a lot of Hong Kong Chinese came to, and Kerrisdale, you could say, was ground zero in Vancouver of that transformation", said Yu, a history professor at the University of British Columbia.
Lam and her Cabinet swore to serve China and Hong Kong and to uphold the Basic Law, the territory's mini-constitution.
The security lockdown, with massive road blocks and cordoning off of areas around the venues that Mr Xi visited, also gave many a sense of separation of the Chinese leader from ordinary people. He said Xi used nationalist pride "to alienate any opposition voices that call for democracy and universal suffrage both inside China and in Hong Kong".
However, "making everything political or deliberately creating differences and provoking confrontation will not resolve the problems", Xi said.