The document was seen as a warning ahead of the protest. Outraged pro-democracy activists reacted by burning copies of the paper in front of the Chinese central government's liaison office.
Hong Kong became a special administrative region of China in 1997. Under a principle known as "one country, two systems," the freewheeling capitalist bastion is allowed to keep Western-style civil liberties until 2047.
In their advertisement, the business groups said they had "grave concern" that the pro-democracy protest movement was a threat that could "paralyze" the financial district.
"Occupy Central could potentially cripple commerce in the Central Business District, impacting small local businesses and large multinational operations," the ads said. It warned that newspaper vendors, restaurants and fast food outlets could be affected.
The protest organizers should reconsider their "disruptive plans," it said.
The Occupy Central protest calls for 10,000 people to take over the streets of the financial district sometime in the coming months if the government fails to come up with a satisfactory reform proposal to choose the city's next leader, who is currently picked by a committee of mostly pro-Beijing elites.
Beijing has pledged that Hong Kong can choose its own leader in 2017 but has insisted candidates must be acceptable to the central government, rejecting calls for them to be nominated by the public.
The policy document released by the Chinese Cabinet's press office said that some people are "confused or lopsided in their understanding of one country, two systems." This misunderstanding has led to "many wrong views" about the city's economy, society and the development of its political system.
China's central government has "comprehensive jurisdiction" over Hong Kong and was the source of the city's high degree of autonomy, it said.
The document also raised the hackles of the Hong Kong Bar Association, which rejected assertions that judges should act as government administrators carrying out political tasks, saying it would signal that the courts are not independent.
The highly charged debate over political reform has polarized Hong Kong society.
Billionaire Peter Woo, who was a candidate to be Hong Kong's first post-colonial leader in 1997, this week called the protest movement "illegal" and "unwise."
Tycoon Li Ka-shing, Asia's richest person, said earlier this year that it would damage Hong Kong's image and said there were better ways to strive for democracy. However, a group of finance industry professionals is supporting Occupy Central to protest Beijing's growing influence, which they say is eroding the city's competitiveness.