Hong Kong's embattled democracy advocates kicked off 2019 with a large street rally on Tuesday, lamenting what they said had been a grim year for freedoms and steeling themselves for fresh battles with Beijing.

A thousands-strong crowd -- including a small retinue of independence activists -- protested over disappearing political freedoms, rising inequality and the local government's perceived coziness with big business and Beijing.

Semi-autonomous Hong Kong currently enjoys liberties unseen on the mainland including freedom of expression and the press under a deal struck with Britain before the 1997 handover.

But concern is growing that those rights are being eroded by an increasingly assertive China ruled by President Xi Jinping.

Last year city authorities made a series of unprecedented moves that caused alarm among activists and prompted rare criticism from western governments.

In September a tiny pro-independence political party was banned under an obscure national security law designed to target triad gangs.

Soon after a Financial Times journalist who chaired a talk with that party's leader at a press club found himself effectively expelled after officials refused to renew his visa.

Authorities also continued to bar political candidates from standing for local elections if they held pro-independence views.

"We have experienced a lot in 2018 -- society, politics and people's livelihood have all regressed. I can't see hope in 2019," protester Kwan Chun-pong, a 47-year-old production line manager, told AFP.

The majority of Hong Kong's democracy advocates want people to have a greater say in how their city is run, such as the ability to directly elect their leader.

- New challenges -

Mass pro-democracy demonstrations in 2014 blockaded parts of the city for 79 days but failed to win any meaningful concessions.

Although most Hong Kongers do not advocate independence -- a red line with Beijing -- a small group of hardline independence activists emerged from the failure of the 2014 protests, rattling local and mainland authorities.

A few dozen independence activists -- some of them masked -- attended Tuesday's rally, followed by police officers with video cameras.

"We are still coming out today because we still love this place, we want it to change, we want the next generation to feel proud of Hong Kong's identity," activist Wayne Chan shouted through a loud-hailer.

Police said some 3,200 people attended the march at its peak, while organisers gave a higher figure of 5,500.

The city's government, which rejects the suggestion that rights are slipping, said after the rally that it "fully respects" the rights of Hong Kongers to protest and express their views, adding that the rule of law was the "foundation of Hong Kong's pluralistic society and free economy".

The government has previously said that campaigning for independence contravenes the city's mini-constitution.

The Civil Human Rights Front, which organised Tuesday's march, does not support independence but argues the city's free speech laws should allow others to campaign for it.

Activists face new challenges in 2019 with the government hoping to table new national security legislation and laws that would ban disrespecting China's national anthem.

A number of 2014 protest leaders will also find out in April whether a court will jail them after they were prosecuted under a slew of little-used public order offences.

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