Hundreds of people protested in Hong Kong on Sunday against Beijing’s controversial new plan to directly impose national security laws on the city, where a tight police presence guarded China's representative office in the financial hub.

The rally came as the city's government sought to reassure the public and foreign investors over the tough security laws proposed by Beijing that sent a chill through financial markets and drew a swift rebuke from foreign governments, international human rights groups and some business lobbies.

Protesters gathered in the bustling shopping district of Causeway Bay where police conducted stop-and-search operations and warned people not to violate a ban on gatherings of more than eight people, imposed to curb the spread of coronavirus.

"Now is the beginning of the end and time is really running out in Hong Kong, and that's the reason for us, even under the outbreak of COVID-19. We still need to gather our strength to protest," said democracy activist Joshua Wong.

In drafting the legislation, which could see the setting up of Chinese government intelligence agencies in the global financial centre, Beijing plans to circumvent Hong Kong's lawmaking body, the Legislative Council.

The move has sparked concerns over the fate of the "one country, two systems" formula that has governed Hong Kong since the former UK colony's return to Chinese rule in 1997. The arrangement guarantees the city broad freedoms not seen on the mainland, including a free press and independent judiciary.

Authorities in Beijing and Hong Kong have said the proposed laws are necessary and will not harm the city's autonomy.

"These radical claims and illegal violence are extremely worrying," Chief Secretary Matthew Cheung said in a blog post, referring to a backlash against the proposed laws as well as anti-government protests that roiled the city for months from June last year.

"We must face (this issue) squarely. If the situation is not effectively contained, it may be elevated to the level of endangering national security."

Secretary for Security John Lee said the laws will help maintain Hong Kong's long-term prosperity.

A small group of democracy activists protested outside Beijing's Liaison Office, chanting, "National security law is destroying two systems."

A water-cannon truck was parked outside, while dozens of riot police were deployed across the city.

Avery Ng of the League for Social Democrats pasted protest signs on a plaque outside the Liaison Office, despite warnings from police.

He described it as an "evil law" and appealed to Hong Kong people to come out and protest against it.

"It’s a moveable red line. In future they can arrest, lock up and silence anyone they want in the name of national security. We have to resist it," Ng told Reuters.

Some local commentators have described the proposal as "a nuclear option" that is part of Chinese President Xi Jinping's high-stakes power play.

A backlash intensified on Saturday as nearly 200 political figures from around the world said in a statement the proposed laws said the proposed laws are a "comprehensive assault on the city's autonomy, rule of law and fundamental freedoms".

China has dismissed other countries' complaints as "meddling" and rejected concerns the proposed laws would harm foreign investors.

Protest organisers initially planned a rally for Saturday against a controversial national anthem bill, which is due for a second reading at the Legislative Council on Wednesday. The proposed national security laws sparked calls for more people to take to the streets.

Hong Kong has increasingly become a pawn in deteriorating relations between Washington and Beijing, and observers will be watching for any signs of resignation to defeat among the broader local community or indications that activists are gearing up for a fresh challenge.

Anti-government protests that escalated in June last year plunged the city into its biggest political crisis in decades, battered the economy and posed the gravest popular challenge to President Xi since he came to power in 2012.

The sometimes violent clashes that roiled the city saw a relative lull in recent months as the government imposed measures to curb the spread of coronavirus.