HONG KONG (REUTERS) - Chinese President Xi Jinping offered his support for Hong Kong leader Carrie Lam on Monday (Dec 16), praising her courage in governing the Chinese-ruled financial hub in these "most difficult" times after months of often violent anti-government protests.

"The situation in Hong Kong in 2019 was the most complex and difficult since its return to the motherland," Mr Xi told local media in brief comments before a closed-door meeting with Mrs Lam in Beijing.

"The central government fully recognises the courage and assumption of responsibility you have displayed in these exceptional times in Hong Kong."

Hong Kong returned to Chinese rule in 1997 with the promise of wide-ranging autonomy under a "one country, two systems" formula, including a free press and independent judiciary, which the protesters say is being eroded by Communist Party rulers in Beijing.

China denies the charge.

Hong Kong media have speculated that Mrs Lam's talks with Mr Xi could yield fresh directives on the crisis, including a possible cabinet reshuffle.

Mr Xi did not go into specifics, but reiterated his support for Mrs Lam despite some previous media reports suggesting she might be replaced.

He added Beijing was "unwavering in supporting Hong Kong police in firmly upholding the law" and said Mrs Lam had continued to uphold the "one country, two systems" principle.

Mr Xi said last month that China was "unwavering" in defending national security and sovereignty, implementing the "one country, two systems" policy and opposing foreign forces interfering in Hong Kong.

He stated on Monday that these were Beijing's basic positions on Hong Kong affairs.

Ms Lam earlier met Chinese Premier Li Keqiang, who said Hong Kong was not yet out of the "dilemma" facing the city's economy after months of sometimes violent protests.

The meetings come after Hong Kong police fired tear gas in late-night street clashes with protesters on Sunday as the former British colony's worst political crisis in decades drags on for the seventh month.

"Hong Kong right now has not stepped out of its dilemma," Mr Li said in his meeting with Mrs Lam, the opening remarks of which were broadcast by Cable TV.

"The SAR (special administrative region) government must continue its efforts, end violence and stop the chaos in accordance with the law and restore order."

Anti-government protests in the city since June have posed one of the biggest populist challenges to Mr Xi's rule. The unrest has also complicated ties between China and the United States at a time of heightened tensions, including over trade.

Mrs Lam said on Monday she was encouraged by Mr Xi's recognition of her efforts.

"This year is of course a rather special one because in the last six months Hong Kong has been haunted by social unrest, disturbances and violence acts," she said. "So I spent a bit more time to give them an account of where things stand."

Amid signs of the city's growing economic woes, Mrs Lam said China had pledged to continue to offer favourable economic policies and its full support, including development in the Greater Bay Area in Guangdong province adjoining the city.

Late on Sunday, groups of masked young people - angered by what they see as Chinese meddling in freedoms promised to Hong Kong when the former British colony returned to Chinese rule in 1997 - blocked roads around Mong Kok district, prompting police to fire multiple rounds of tear gas and baton charge crowds.

It was the first time in nearly two weeks that tear gas had been deployed by police.

Fires were lit and traffic lights smashed, while one student reporter for Baptist University was hit in the face by a police projectile and had to be hospitalised, local television footage showed.

Small bands of protesters marched through several malls, blocking entrances, smashing glass and chanting slogans including "fight for freedom". Many shops in affected malls closed early after battalions of riot police stormed in, pepper-spraying crowds and making multiple arrests.

Despite the protesters' demands and anti-China rhetoric, China maintains it is committed to the "one country, two systems" formula granting Hong Kong a large degree of autonomy and freedoms denied other cities in the mainland.

Press freedom in Hong Kong has come under an accelerating squeeze despite China's pledges to maintain an open society, the Committee to Protect Journalists (CPJ) said in a report on Monday.

Large media properties have come under mainland Chinese ownership or influence, while targeted violence has underscored potential dangers for journalists who challenge China's wishes, the report said.

Asked about the report during a daily news briefing in Beijing on Monday, Chinese foreign ministry spokesman Geng Shuang said he has not seen the report and that it was not worth refuting.

ECONOMIC DOWNTURN

The city, home to around 7 million people, entered its first recession in a decade in the third quarter with tourism and retail particularly affected by the sometimes violent protests.

Hong Kong International Airport reported its biggest fall in passenger numbers in more than a decade in November, official data released on Sunday showed.

Mrs Lam's administration has pledged HK$25 billion (S$4.35 billion) in stimulus but analysts say it is unlikely to have a major impact as long as the unrest continues.

Some 7,000 licensed retail establishments out of 64,000 say they will be forced to close down in the next six months, the Hong Kong Retail Management Association said earlier this month.

While the number of protests has lessened in recent weeks from demonstrations nearly every day, the movement still enjoys broad backing, with families with children and retirees still coming out in support.

Protesters have called on the government to address their demands which include an independent inquiry into police behaviour and the implementation of universal suffrage.

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