China's top legislative panel has begun considering how Hong Kong's leader and legislature should be selected in the future.
Police moved in to remove protesters
The standing committee of the National People's Congress (NPC) will look at the territory's constitution, the Basic Law, and rule on Tuesday.
Scuffles broke out in Hong Kong after demonstrations against the meeting.
Pro-democracy campaigners say the move undermines the level of autonomy promised to Hong Kong.
Around 3,000 protesters gathered outside Hong Kong's legislature on Thursday night to demand greater democracy.
A few hundred tried to break into the grounds of government offices and there were scuffles at dawn as the police removed protesters.
Pro-democracy activists say that the Basic Law allows for the election of the territory's leader in 2007, but Beijing strongly opposes this.
"Beijing is abusing its power, using the grey area in the Basic
Law, and taking away Hong Kong people's rights of universal
suffrage," said one protester, Leung Kwok-hung of April Fifth Action Group.
The BBC's correspondent in Hong Kong, Chris Hogg, says that the Basic Law allows for changes to the electoral process after 2007 - if there is a need.
Hong Kong's chief executive Tung Chee-hwa backs Beijing's stand
But the Basic Law does not specify who decides whether the need for any changes exists.
It is that issue which is being decided in Beijing over the next few days.
Peter Wong, one of Hong Kong's delegates to the NPC, said the protests were an overreaction and unnecessary.
"It has actually been brought forward by the... Chinese lawmakers that ultimately, Hong Kong should have universal suffrage, the question is when and how," he told the BBC's World Today programme, adding that the real issue was the electoral method.
Hong Kong's current Chief Executive, Tung Chee-hwa, is supporting Beijing's position.
But the demonstrators argue that Mr Tung is undermining Hong Kong's autonomy - or a system that became known as "one-country-two-systems" when Hong Kong was returned to China in 1997.
"What is at stake now is 'one country, two systems'... is it really going to be 'one country, two systems', Hong Kong people ruling Hong Kong with a high degree of autonomy, or is
Beijing going to interfere with everything that Beijing worries about," said leading pro-democracy legislator Martin Lee.
Our correspondent says a degree of autonomy over its own affairs was guaranteed for Hong Kong under the Basic Law for fifty years.