By Damian Grammaticas BBC Hong Kong correspondent

Events have begun in Hong Kong to mark five years since the territory was handed back from British to Chinese sovereignty.

There have been street parades and demonstrations by democratic activists who are opposed to a second term for Hong Kong's Chief Executive, Tung Chee-hwa.

China's president Jiang Zemin is attending the celebrations.

But the events have been scaled down because the government is facing serious economic problems and wants to save money.

Almost 100 members of the Falun Gong meditation movement were deported from Hong Kong airport when they arrived to join demonstrations in the territory.

Falun Gong followers have been detained at Hong Kong's airport

Five years on from the end of colonial rule, nobody in Hong Kong is in a mood to celebrate despite the officials events to mark the occasion.

In the past five years, the territory's economy has taken a battering.

Property prices - a major source of wealth - have fallen by half, unemployment has tripled, many people's wages are being cut.

There is a real sense of pessimism that Hong Kong has lost its way.

'Silencing dissent'

And there are fears that the territory's freedoms, supposedly guaranteed for 50 years, are being whittled away too.

The Falun Gong followers were seeking to stage protests against the group's persecution in mainland China.

A few days ago Harry Wu, a leading Chinese dissident was refused a Hong Kong visa.

And the Hong Kong government is busy prosecuting Falun Gong members and local political activists for staging public demonstrations.

Critics say they are targeted prosecutions aimed at silencing dissent, and are an abuse of the legal system.