The anniversary arrived as the city was locked in a debate about full autonomy - and even independence - in Hong Kong.

By issuing the paper, Beijing has sought to establish its unquestioned authority over Hong Kong as residents debate the meaning - and the flexibility - of the "one county, two systems" concept.

That principle has allowed a freer, capitalist city to grow within socialist China.

IN FULL: Chinese State Council white paper on ‘One Country, Two Systems’ policy in Hong Kong

"Many Hong Kong people have the misconception that the central government's power over Hong Kong is confined to foreign affairs and national defence. Some even try to downplay Beijing's jurisdiction over Hong Kong," said Jiang Shigong , deputy director of Peking University's Centre for Hong Kong and Macau Studies.

"In fact, the central government enjoys a wide range of powers over the city."

Jiang, a researcher in the central government's liaison office in Hong Kong from 2004 to 2008, said it was the first time since the 1997 handover that Beijing had set out in an official document its authority over Hong Kong.

Lau said the debate about political change - especially the best way to honour the promise of universal suffrage when the city elects its chief executive in 2017 - had prompted Beijing to issue the document.

Lau said he expected Beijing would be more involved in Hong Kong's governance in future.

"Some people in Hong Kong have been trying to reject Beijing's legitimate power over Hong Kong," said Lau, the former head of the Hong Kong government's Central Policy Unit.

The white paper says some Hongkongers are "confused and lopsided" in their understanding of the "two systems" policy.

Some see it as a direct attack on the plan by Occupy Central to stage a large protest in the business district.

The group has not set a date for its protest, but is organising an unofficial vote on three plans for conducting the 2017 election.

That vote is scheduled for June 20-22.

Chief Executive Leung Chun-ying dismissed the idea that the white paper was intended to discourage people from taking part in Occupy Central's "referendum".

"It took a year [for the State Council] to prepare and draft this white paper and to translate it into seven languages, and [it is not possible] that a white paper can be suddenly made up in one or two months because something will be happening in Hong Kong in the coming weeks," he said.

Rao Geping, a member of the Basic Law Committee, agreed, saying the Occupy Central organisers had decided on the voting exercise only recently, while it would take Beijing at least six months to draft and finish a white paper.

Federation of Hong Kong Industries chairman Stanley Lau Chin-ho said some people feared the city had hurt itself by politicising an issue that had no business being tangled in politics.

He pointed out recent filibusters by some pan-democratic legislators who sought to delay infrastructure projects.

"The delay can benefit no one," Lau said. "It can only slow down development in Hong Kong."

Mo Pak-hung, an associate professor at Baptist University's department of economics, said: "The quality of governance is weakened because of the politicisation of livelihood issues, and it will certainly have an adverse impact on the city's competitiveness."

KEY POINTS

HKSAR is an inseparable part and a local administrative region directly under China's Central People's Government.

China's central government has comprehensive jurisdiction over all local administrative regions, including the HKSAR.

The high degree of autonomy of HKSAR is subject to the level of the central leadership's authorisation. There is no such thing called "residual power".

The most important thing to do in upholding the "one country" principle is to maintain China's sovereignty, security and development interests, and respect the country's fundamental system and other systems and principles.

The "one country" is the premise and basis of the "two systems", and the "two systems" is subordinate to and derived from "one country".

For Hong Kong to retain its capitalist system and enjoy a high degree of autonomy with "Hong Kong people governing Hong Kong" according to the Basic Law, it must fully respect the socialist system practised on the mainland in keeping with the "one country" principle and, in particular, the political system and other systems and principles in practice.

The mainland should respect and tolerate the capitalism embraced by Hong Kong while upholding its socialist system, and draw on the successful experience of Hong Kong in economic development and social management.

The Basic Law, which was formulated in accordance with the Constitution, provides for the system of the HKSAR and enjoys the legal status as its constitutional law.

We should respect and uphold the power of interpretation and amendment of the Basic Law vested in the NPC and its Standing Committee.

We should improve the systems and mechanisms related to implementing the Basic Law, which will help enhance its authority.

It is necessary to … exercise well the power invested in the central government as prescribed in the Basic Law and see to it that the relationship between the central government and HKSAR is indeed brought onto a legal and institutionalised orbit.

Loving the country is the basic political requirement for Hong Kong's administrators [including the chief executive, principal officials, members of the Executive Council and Legislative Council, judges … and other judicial personnel].

The Central People's Government … issues directives to the chief executive.

If the NPC Standing Committee … considers that any law enacted by the legislature of the region is not in conformity with the provisions of the Basic Law regarding affairs within the responsibility of the central leadership or regarding the relationship between the central leadership and the region, the Standing Committee may return the law in question but shall not amend it.

The system of universal suffrage for selecting the chief executive and forming the Legislative Council must serve the country's sovereignty, security and development interests, tally with Hong Kong's actual conditions, take into consideration the interests of all social strata, give expression to the principle of equal participation, and be conducive to the development of capitalism in Hong Kong.

It is necessary to stay alert to the attempt of outside forces to use Hong Kong to interfere in China's domestic affairs, and prevent and repel the attempt made by a very small number of people who act in collusion with outside forces to interfere with the implementation of "one country, two systems" in Hong Kong.