Hong Kong rights record under fire as it marks China handover anniversary
July 1 in Hong Kong had been marked in previous years by demonstrations but authorities have cracked down on dissent after huge and sometimes violent pro-democracy protests in 2019.
Lee said "high-level security to safeguard high-quality development" was a top priority for his administration, noting the need to integrate into China's economic blueprint.
The city this week also marked the fifth anniversary of Beijing's imposition of a sweeping national security law, under which 76 people have been convicted so far, imposed after the 2019 protests.
Lee's government enacted a separate security law of its own in 2024 that authorities say is needed to restore order.
"We have rebuilt a safe Hong Kong," Lee said in a speech.
However, the European Union said on Monday "the repressive use of the National Security Law has undermined confidence in the rule of law and Hong Kong's international reputation".
"The European Union regrets that additional national security legislation... introduced new offences, increased penalties and further empowered security authorities," it said in a statement.
The League of Social Democrats, one of Hong Kong's last remaining opposition parties, disbanded on Sunday citing "immense political pressure" and concern for the safety of its members.
It was the second pro-democracy party to announce plans to wind down this year, following the Democratic Party in February.
Outgoing US consul general in Hong Kong Gregory May also criticised the Hong Kong government last week for using the security law to target overseas activists.
Authorities say that Hong Kong residents continue to enjoy rights and freedoms guaranteed under its Basic Law constitution, although such rights are not absolute.
Lee also said Hong Kong will speed up an ambitious plan to urbanise land near its border with China, a development known as the Northern Metropolis that will take up a third of Hong Kong's total area.
The project has raised concerns over its environmental impact as well as its long-term burden on Hong Kong's public finances.
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