Xi is to swear in the global financial hub's new leader, John Lee, on Friday during his first visit to the city since 2017, which is also his first known trip outside the mainland in more than two years, amid the COVID-19 pandemic.
Wearing masks, Xi and his wife, Peng Liyuan, stepped off a high-speed train to be greeted by children waving flowers and Chinese and Hong Kong flags who chanted, "Welcome, welcome, warmly welcome" in Mandarin.
"Hong Kong has withstood severe tests again and again, overcoming challenges one by one," Xi said. "After the wind and rain, Hong Kong has risen from the ashes."
Authorities organised a lion dance celebration while a police band played. Heavy security surrounded the train station, with police making stop-and-search checks, assisted by sniffer dogs.
Some analysts see Xi's visit as a victory lap after Beijing tightened its control of Hong Kong with a sweeping national security law, following mass pro-democracy protests in 2019.
Outgoing leader Carrie Lam and her husband were among those who welcomed Xi at the train station, unused for two years because of the pandemic.
City streets were festooned with red China flags and posters declaring a "new era" of stability.
Xi's full official schedule for the visit has not been released. It was not immediately clear if the celebrations would be affected by a typhoon forecast by weather officials on Wednesday.
On his last visit to Hong Kong, Xi warned against any acts endangering China's sovereignty, saying the city needed to beef up its national security arrangements.
While tens of thousands of protesters had marched during Xi's visit five years ago, no protests are expected this year.
Lui Kam-ho, a senior policeman, warned this week against any acts of violence or public disorder. The police force of more than 30,000 said it would deploy its resources to ensure security for the celebrations.
Police closed parts of Hong Kong, blocking roads and enforcing a no-fly zone over the central Victoria Harbour.
Members of pro-democracy group the League of Social Democrats said they would scrap plans for demonstrations after national security officers warned them not to protest during Xi's visit.
Incoming leader Lee, a former policeman the United States has placed under sanctions over the national security law, and Lam have been taking daily COVID tests and staying in a quarantine hotel for days before Xi's visit, media said.
Hong Kong's 2,000 new coronavirus infections on Wednesday were its highest since April.
China's strategy of stamping out COVID-19 outbreaks as soon as they occur, at just about any cost, contrasts with a global trend of co-existing with the disease.
Xi said the strategy was "correct and effective" and should be firmly adhered to, during a visit on Tuesday to the central city of Wuhan where the virus was first reported.
Journalists from several local and international media organisations have been blocked from covering the ceremonies, with the Hong Kong government citing security requirements.
Xi, who is poised to secure a precedent-breaking third leadership term at a once-in-five-years Communist Party congress this year, is expected to spend the night in Shenzhen on Thursday before departing from Hong Kong on Friday.