MACAU (Reuters/AFP) - Chinese President Xi Jinping warned Hong Kong and Macau on Saturday to remember they are part of "one China", as pro-democracy campaigners in both semi-autonomous territories call for free leadership elections.

Mr Xi, in Macau to celebrate the 15th anniversary of the former Portuguese colony's handover to Chinese rule, warned both territories on Saturday against a "misguided approach". "We must both adhere to the 'one China' principle and respect the difference of the two systems," he said at the inauguration of Macau's chief executive Fernando Chui, who was selected for a second term by a pro-Beijing committee in August.

"At no time should we focus only on one side to the neglect of the other. This is the only way leading to sound and steady progress. Otherwise a misguided approach from the beginning, just like putting one's left foot into the right shoe, would lead us to nowhere," Mr Xi said.

Mr Xi also gave his backing to Hong Kong leader Leung Chun Ying, who he met in Macau on Friday, pledging "full trust" in him following the clearance of the protest camps that blocked major highways for over two months.

Mr Xi Jinping on Saturday also urged the world's biggest gambling hub, Macau, to accelerate diversification away from its bread-and-butter casino industry, which has lost about US$60 billion (S$79 billion) in market value over the last six months.

He said although it had developed rapidly, certain deep-seated problems which have existed for a long time had come to light. "It is important for Macau to adopt a global, nationwide, future-oriented and long-term perspective, formulate appropriate plans and blueprints for its development and promote sound economic and social development," Mr Xi said, in comments carried on Chinese state television. "Focus on building a global tourism and leisure centre... promote the Macanese economy's appropriate diversification and sustainable development. This is of great importance for the interests of the people of Macau."

Mr Xi, who made no direct mention of Macau's casinos, swore in Macau leader Ferenando Chui for his second, five-year term at the ceremony, which was also attended by Hong Kong chief executive Leung Chun Ying.

Mr Chui said the government would continue to give priority to stable development and the orderly adjustment of the economic structure.

Mr Xi also called on the Special Administrative Region to boost law-based governance, Xinhua reported.

He also spoke about the "one country, two systems" policy, saying the upholding of which would be in line with China's "fundamental interests", according to Xinhua.

Mr Xi praised the model, saying it was also in the interests of international investors. "No matter what difficulties or challenges we may encounter, they could never shake our confidence and resolve to uphold the principle and advance the practice of 'one country, two systems'."

Upholding the policy would ensure the prosperity and stability of Hong Kong and Macau, Xinhua quoted Mr Xi as saying.

Macau has been held up as a good example of the "one country two systems" model, under which both it and Hong Kong came under Chinese rule, after Hong Kong was roiled recently by pro-democracy protests for nearly three months.

Mr Xi's visit comes as Macau has been battered by his pervasive anti-corruption campaign, with revenues for 2014 expected to drop for the first time since casinos were liberalised over a decade ago.

High-roller gamblers have increasingly steered clear of Macau, on the mouth of the Pearl River delta, unnerved by the increased scrutiny of the gaming industry as Mr Xi's anti-graft drive shows no signs of letting up.

Record flows of mainland mom and pop players, known as "mass-market" customers, are also spending less on the gambling tables. The outlook looks gloomy, with Mr Xi's campaign unrelenting and weak growth curbing demand to gamble in China's only legal casino hub, despite two new resorts set to open on the city's Cotai strip.

Macau, a special administrative region like neighbouring Hong Kong, is opening eight new casinos over the next three years, adding infrastructure including a 30km bridge connecting Macau, Hong Kong and the mainland and high-speed rail.

Yet a series of negative factors including negative credit growth, regulatory restrictions on visas and a smoking ban look set to impact revenue growth for at least the first half of 2015.

More than 100 people are expected to turn out for a pro-democracy rally in the historic centre of Macau on Saturday afternoon.

"In the light of Hong Kong's umbrella movement, I think Macau people should escalate our actions for democracy," local protest leader Jason Chao told AFP.

"We need a democratic political system in which the citizens can hold the officials accountable," Mr Chao said, adding that despite a huge economic boom in the past decade, the quality of life for citizens has been on the decline, with government officials seen as too close to big business.