POLICE in Hong Kong have arrested more than 500 people who refused to leave a street in the financial district, a day after tens of thousands joined a march to demand democracy free from China's interference.

The march is an annual affair held on the anniversary of the day China took over Hong Kong from Britain - June 1, 1997 - with a vow to give the city a high degree of autonomy for 50 years.

But there is growing unease among its residents that their Western-style civil liberties are being eroded as Beijing increasingly tries to impose its authority over the capitalist enclave.

Those fears are only going to be heightened following the pre-dawn crackdown by Hong Kong police, who normally do not have an antagonistic relationship with the public, unlike security forces in mainland China.

Police said 511 people were arrested for unlawful assembly in the business district.