Beijing favourite Carrie Lam was selected as Hong Kong's new leader on Sunday by a mainly pro-China committee, in an election dismissed as a sham by democracy activists who fear the loss of the city's cherished freedoms.

It is the first leadership vote since mass “Umbrella Movement” rallies calling for fully free elections in 2014 failed to win reforms and comes after a turbulent term under current chief executive Leung Chun-ying.

Leung, who is seen by opponents as a Beijing puppet, and will step down in July after five years in charge.

Hong Kong is semi-autonomous and has been governed under a “one country, two systems” deal since it was handed back to China by Britain in 1997.

But, 20 years on, there are serious concerns Beijing is disregarding the handover agreement designed to protect Hong Kong's way of life.

Around three quarters of the 1,194 members of the election committee were from the mainland camp.

An emotional Lam bowed to supporters at it was announced she had won comprehensively with 777 votes against 365 for her more moderate establishment rival John Tsang.

The third and most liberal candidate, Woo Kwok-hing, received just 21 votes.

Frustration at what activists see as China's increasing influence and a lack of promised political reform has sparked calls for self-determination for Hong Kong, or even a complete split from China.

Lam was widely seen as Beijing's pick for the job throughout the race and will become Hong Kong's first ever woman chief executive.

She is intensely disliked by the pro-democracy camp after promoting the Beijing-backed reform package that sparked 2014's massive protests. That plan said the public could choose the city leader in 2017, but insisted candidates must be vetted first.

It was eventually voted down in parliament by pro-democracy lawmakers and reforms have been shelved ever since.

Hundreds of protesters including leading pro-democracy activist Joshua Wong gathered near the harbour-front voting venue. They chanted: “Oppose central authority appointment, we choose our own government!”

Protesters were held back by police as some tried to push through barriers. Nearby, pro-China supporters played marching music surrounded by national and city flags.

Rebel legislator Nathan Law, who as a lawmaker has an automatic vote, said he would enter a blank ballot.

“It is still a selection from the Beijing government,” Law told AFP.

Uphill struggle

Representatives of a broad number of sectors, from business to education, sit on the committee that chooses the chief executive, but the vast majority of the city's 3.8 million electorate have no say in the vote.

Leading business figures including Hong Kong's richest man Li Ka-shing waved to reporters as they went in to cast their votes. Pro-democracy committee members threw their weight behind Lam's main rival, ex-finance secretary Tsang. But activists said he was still on the side of Beijing rejected the vote outright as unrepresentative of Hong Kong people.

Lam will face an uphill struggle to unite a city in which young people in particular have lost faith in the political system and their overall prospects.

With salaries too low to meet the cost of property in an overpriced market fuelled by mainland money, getting ahead in life is seen as increasingly difficult. She says she will try to build consensus by focusing on social issues, including poverty and housing. But critics say she is dodging the bigger political questions and will pave the way for Beijing to extend its influence.

That anxiety comes off the back of a number of incidents under Leung that rocked public confidence. They include the disappearance in 2015 of five Hong Kong booksellers known for publishing salacious titles about China's political elite. The booksellers all resurfaced in detention on the mainland.

Last year, the disqualification from parliament of two publicly elected pro-independence lawmakers following a Beijing intervention also prompted accusations the city's legislature had been seriously compromised.