Clashes broke out between police and protesters in Hong Kong on Saturday after thousands took part in a peaceful march in an out-of-town district in Hong Kong.

After the end of the Reclaim Sheung Shui protest against parallel traders who snap up goods such as foreign-made formula milk, medicines and soy sauce for reselling in China in the town near the mainland border, hundreds of protesters put on goggles, face masks and hard hats and occupied the streets around the train station, which had been cordoned off for the police-sanctioned demonstration earlier.

The scene descended into chaos near a shopping centre shortly after 5pm local time. People rushed to rally outside a community hall, where a police van was parked and a protester was reportedly held by the police. Some dismantled roadside metal barriers and set up makeshift barricades and faced off with police officers on several streets.

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Police then raised red warning flags to order protesters to leave immediately. They later used pepper spray several times to disperse the crowds and beat some of the protesters with truncheons, who in turn used umbrellas to defend themselves.

“Nasty police! Shame on you!” protesters chanted.

A witness said he saw at least a dozen people injured by pepper spray and one person was bleeding after being beaten by a police baton.

Many shops popular with parallel traders and mainland tourists closed in Sheung Shui, fearing being targeted by protesters. Some protesters took their anger out on a Bank of China branch, which they spray-painted, while others besieged a medicine shop, which was forced to close.

The scene had calmed down somewhat by 8pm, when most of the protesters were leaving, but more than a hundred police officers in riot gear suddenly appeared at 8.10. Police went on to several streets and footbridges, apparently looking for protesters.

Andrew Wan, a lawmaker, said he was hit by a policeman on his head with a baton and several members of the press were also reportedly hit and attacked by pepper spray. Local press reported that a teenager nearly fell off a footbridge after he was chased by police.

As of 9.30pm, a large number of police officers in riot gear were still standing guard and many police vans were still parked around a shopping centre and train station where protesters had earlier congregated. Most of the protesters had left by then but police continued to stop passersby on a footbridge near the shopping centre to check their identity and search their bags.

The Hong Kong government issued a statement shortly after midnight that while most protesters behaved in a peaceful and orderly manner, it “strongly condemns the violent acts committed” after the protest, including protesters blocking roads, charging police cordons, assaulting police officers and throwing iron rods and scattering unidentified powder.

It also responded to the protest by saying it has already arrested a number of parallel traders and blocked some from entering Hong Kong and will continue to “mitigate the impact on the community brought by parallel trading activities”.

Many interviewed by the Guardian earlier in the day said the millions-strong anti-extradition protests during the past month became a lightning rod for them.

“Restore Sheung Shui to its former glory,” “Restore our serenity” and “Kick out parallel traders,” shouted many at the march earlier in the day.

They said they resented the government for having turned a blind eye to the border town being overrun with parallel traders for more than a decade. They accused them of filling the streets with cardboard boxes of commodities and leaving behind piles of rubbish, while neighbourhood shops were squeezed out of business due to high rents and replaced by shops selling goods popular with mainland tourists and traders.

“We didn’t use to bother coming out to air our grievances on local issues, but now that we realise that in unity, we can show our strength, there is no reason not to come out,” said Leona Ip, who lives in Yuen Long, another town frequented by mainland parallel traders. She also said the anti-extradition protests in the past month had emboldened her to fight for local issues which affect her community.

Others described the huge anti-extradition protests as “an awakening” to remind them that China is also eroding Hong Kong’s way of life.