MACAU (AFP) - Chinese President Xi Jinping flew into Macau on Friday as Beijing puts pressure on the gambling hub to diversify away from casinos as part of an anti-corruption drive and pro-democracy protesters prepare to march for free elections.

Mr Xi's two-day visit marks the 15th anniversary of the handover of Macau from Portugal to China and is also an opportunity to drive home the message that the semi-autonomous territory needs to see life beyond the gaming tables.

Dozens of elementary school pupils waved Chinese and Macau flags and bouquets of roses enthusiastically in the cold weather to receive Xi at the city's airport where police and men in suits were seen patrolling the arrivals hall with a sniffer dog. Some taxi drivers in the city also flew the Macau and Chinese flags on their vehicles to mark the event.

The authorities were on guard on Friday for signs of dissent, with reporters on the airport tarmac waiting for Mr Xi not allowed to hold umbrellas, and handed raincoats instead. "They said you couldn't open umbrellas at the airport because it would affect the flights," a Hong Kong-based reporter who was among up to 40 journalists at the scene told AFP.

Another reporter said airport authorities had explained it was too windy to safely unfurl an umbrella - a symbol of the Hong Kong democracy movement after protesters used them to shield themselves from police pepper spray.

And despite the light rain, no one in the official receiving party used them either.

"I believe that under the one country two systems and the Basic Law, Macau definitely will be increasingly stable and better as time passes," the leader told reporters after stepping off the plane, referring to the territory's semi-autonomous status.

But in the spirit of Hong Kong's Occupy movement, which gripped the city from late September, hundreds of pro-democracy protesters are planning a march last Saturday from Macau's historic city centre.

Several Hong Kong activists, including veteran lawmaker Leung Kwok Hung, were reportedly turned back at Macau's ferry terminal as they held up yellow umbrellas and a large yellow banner which read "I want real universal suffrage, have you received the message, Xi Jinping?"

Macau is the only part of China where casino gambling is legal and after the sector was opened up to foreign competition in 2002, it became a paradise for high rollers, overtaking Las Vegas as the world's gaming capital in terms of revenue.

But casinos saw their worst drop ever in October, plunging 23 per cent to 28.025 billion patacas (S$4.61 billion) compared to the same month last year.

Analysts said the decline was due to the reining-in of China's big spenders in a graft crackdown initiated by Xi, as well as a slowdown in the mainland economy.

Earlier this month, a top Chinese official for Hong Kong and Macau, Mr Li Fei, warned the territory to reconsider its dependence on gambling in the interests of the nation.

"Xi Jinping will not criticise the Macau government (during the visit), but Li Fei has already said it cannot rely heavily on casino capitalism," said Hong Kong-based political analyst Sonny Lo.

Part of Xi's message would be that the territory "has to make economic adjustments to diversify its economy, rather than relying on casinos heavily, which have become safe havens for corrupt mainland officials," Mr Lo added.

- March for free elections -

Beijing is already clamping down on illicit funds channelled from the mainland through Macau's casinos, according to reports.

China's Ministry of Public Security will be given access to all transfers through the state-backed China UnionPay bank payment card to identify suspicious transactions, the South China Morning Post said this week, citing unnamed sources.

Mr Xi's visit also comes after more than two months of mass pro-democracy protests in neighbouring Hong Kong, which ended on Monday when police cleared the last remaining rally camp.

A march for free leadership elections in Macau is set for Saturday afternoon.

Both Hong Kong and Macau's governments are headed by chief executives chosen by a pro-Beijing election committee.

One Macau pro-democracy leader told AFP how he had been tailed by unidentified men ahead of the visit, while local media reported that two Hong Kong students had been refused entry.

Macau's current chief executive Fernando Chui will be officially inaugurated by Xi during a ceremony Saturday after being selected for a second term in August.

Senior Beijing officials have recently praised Macau as a shining example of "one country, two systems", in comments seen as a veiled warning against Hong Kong-style civil disobedience.

Mr Xi's visit would "send a message indirectly to Hong Kong that the Macau model of political development is to be followed," said Mr Lo.