A multi-million dollar programme of events in Hong Kong will mark 20 years since the city was handed back to China by colonial ruler Britain, but critics say the show is out of step with political tensions.

The large-scale celebrations come despite increased concerns over Beijing meddling in the semi-autonomous city and deep political divisions between Hong Kong's pro-democracy and pro-China camps.

China's President Xi Jinping is expected to visit for the July 1 anniversary, with security exercises under way in preparation.

Hundreds of events, from art exhibitions to sports tournaments, will take place between now and the end of the year as part of the festivities, with the government proposing to spend HK$640 million ($82 million).

Coloured lights and rainbow posters already adorn local neighbourhoods under the slogan "Together, Progress, Opportunity".

An official video of Canto pop stars performing a new song "Hong Kong, our home" is frequently broadcast on television networks.

The city's unpopular outgoing leader Leung Chun-ying said the celebrations reflected the city's "vision of tomorrow", and aimed to engage all residents.

"The handover to me is historically significant and worth commemorating because Hong Kong is originally a part of China," a 51-year-old resident who gave his name as Michael said.

Retiree Ah Yu, 76, agreed.

"The (anniversary) is important for Hong Kong because we are all Chinese," he said.

But others were sceptical.

"Are we celebrating the fact that we don't have freedom and have no democracy?" 67-year-old Ales Li asked.

"Why don't they use all these resources to mend divisions?"

The agreement made between Britain and China in 1997 was designed to secure Hong Kong's semi-autonomous status, protecting its freedoms and way of life for 50 years.

But Beijing stands accused of undermining the deal, triggering protests and a fledgling independence movement.

Some young residents told AFP they felt the celebrations were simply a stunt.

"It isn't really helpful towards anyone," said university student Miranda Yeung, 20.

"It's a great publicity campaign and it looks very exciting for a tourist, but it doesn't really mean that much."

Others said the amount of money being spent was a waste in a city with a yawning wealth gap.

- Growing anger -

Frustration over a lack of political reform despite mass pro-democracy protests in 2014 has led to the emergence of groups demanding self-determination for Hong Kong or even a full split from China.

That has sparked a backlash from Beijing, with Chinese authorities intervening to effectively bar two democratically elected pro-independence lawmakers from taking up their parliamentary seats in Hong Kong last year.

The pair are now facing criminal charges over their behaviour in parliament.

There are also concerns Beijing is interfering in other areas, from media to education.

Those fears were heightened by the disappearance of five Hong Kong booksellers known for publishing salacious titles about Chinese leaders in 2015.

All five resurfaced on the mainland.

Some believe a visit to the city by President Xi -- his first to Hong Kong since coming to power in 2012 -- could be incendiary in the current climate.

"The angry people will become more angry," said student Yeung.

Former Chinese leader Hu Jintao came to mark the 15th handover anniversary in 2012 and swore in city leader Leung, triggering hundreds of thousands to take to the streets in protest.

Hong Kong's new pro-China leader Carrie Lam -- hated by the city's pro-democracy activists -- will be sworn in on July 1.

She has vowed to heal divisions but critics say the extensive handover festivities are unlikely to help.

- 'Ugly scenes' -

Art works from the Louvre, Egyptian mummies from the British Museum and an exhibition from Beijing's Palace Museum will be on show as part of the celebrations.

Other events include jiansi tournament -- a game where participants kick a shuttlecock about -- and a performance by renowned Chinese pianist Lang Lang.

Authorities said government ministers would visit communities to "show care" to the vulnerable and elderly, including giving out gifts and care packages as part of the anniversary programme.

But political analyst Willy Lam said the festivities were a display for Beijing.

Both Leung and Lam would want to give the impression that the public was "ecstatic about China's support for Hong Kong" to counteract the recent political turbulence, he said.

Lam predicted a Xi visit would be a red rag to some activists.

"I expect there will be ugly scenes," he said.

"The police will be under heavy pressure to ensure that Xi Jinping will be out of earshot."

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