The delay of a proposed national-security law for Hong Kong this week has deflected - but hardly resolved - a significant political problem for China's leaders.
Wednesday, upwards of 40,000 people gathered peacefully in downtown Hong Kong - building on momentum gained when a half-million demonstrators took to the streets July 1 to protest Article 23, as the law is known.
In the past week, the surprise and uncertainty in Beijing over the march, and cabinet resignations in Hong Kong and public calls to replace its chief executive - have deepened a crisis in both cities.
But the issue goes past the opposition to Article 23. It reaches to the sensitive question of China's image, and Hong Kong's special status - something Beijing proudly touted as a new geopolitical model when the British returned Asia's financial hub to China in 1997.
That special status, know as "one country, two systems" ensured that Beijing brought Hong Kong into its borders. But it also meant Beijing agreed not to meddle in the city's affairs for 50 years.
The current crisis is a public disagreement over the vast gap between the theory and the reality of implementing Hong Kong's status. And it has left officials here struggling with questions of how to gain more control over a city flying Chinese flags, while at the same time creating the appearance that Hong Kong residents enjoy an autonomous system, sources say.
"This is a test moment for the mainland," says a leading professor in Beijing who requested anonymity. "If the mainland moves too boldly or roughly now, it will lead to trouble in Hong Kong later. I'm worried that democracy movements there are too strong. Only by adhering to law can Hong Kong hope to improve its status and its economy."
So intently did Beijing want the law passed, and so intrusive were its methods, that even during the peak of the SARS epidemic in Hong Kong, a time when the city was immobilized, the executive in Hong Kong insisted on pushing it through.
Wednesday's crowd started gathering at 6:30 p.m. Protestors, dressed in white T-shirts (a Chinese symbol of mourning) sat in neat rows on a main avenue and two adjoining parks that are framed by an I.M. Pei-designed office tower. The atmosphere was of a well-behaved party. The crowd cheered in unison when "We Shall Overcome" was sung in Cantonese followed by an English version. T-shirts saying "return power to the people" were handed out along with green flourescent "candles" that the crowd rhythmically waved.
Most people said they hadn't seen anything like it since 1989. "We are tired of being told what to do," says a young bank clerk there with her family.
For China's rulers, not used to open discussions or the cosmopolitan culture of their Hong Kong kin, the massive protest on July 1 was a shock that has spawned different approaches to the crisis, and Wednesday's gathering will be closely examined as well. Some factions are known to favor a "tough" approach, others a "cool" one, sources say.
Beijing officials traditionally avoid acknowledging crises that imply they may not be in full control. In recent days, officials have struggled to explain how much or whether they support Hong Kong's pro-China chief, Tung Che Hwa, saying it is an internal Hong Kong matter. Mr. Tung, widely disliked in his city, first tried to push Article 23 despite the July 1 protest. He backed down when a key ministerial ally resigned Monday, leaving a question whether he had the votes to pass the bill.
The crisis has led Beijing officials to debate the effect of the "one country, two systems" showdown in Hong Kong on the citizens of Taiwan, sources say. China has promised Taiwan that it will offer a similar "one country, two systems" formula for unification with that island, which China feels is part of its historic territory.
Beijing authorities are also concerned, sources say, that weeks of large street protests in Hong Kong could eventually spark unwanted trouble in mainland China - though such concerns at this point seem minor. State media and Internet chat rooms are strictly censored. The marches and the complexities of Article 23 are not a story here. "I think we are more worried that the Hong Kong protests could affect the mainland, than we are worried about their effect on Taiwan," says a director at a leading Beijing think tank.
Article 23 would allow Hong Kong authorities unprecedented rights to search homes, imprison journalists, and arrest citizens affiliated with groups deemed a threat by the mainland. Hong Kong is home to pro-Tibet groups and the Falun Gong spiritual sect that could be targeted. Last week, Tung announced revisions, but legal activists say they fall short.
"This is a big problem, terribly bad from the Beijing view," says a member of the Chinese Academy of Social Sciences. "Article 23 may be a fuse in Hong Kong, and there are very different ideas about how to handle it here."
Still, it seems the winning hand in Beijing is being played by the "let things cool down" faction. The hope is that the protest spirit will die down and revisions made over the summer will be significant enough to appease the Hong Kong public. A number of Beijing academics feel the protest is serving as a learning experience for the central government. Hong Kong activists and even ordinary people feel Beijing is simply recalculating how to retain control.
"We know that if we let Beijing have the [Article 23] law, that will be the end of our rights," says a barber in Hong Kong. "There will be nothing we can do. You have to be naive to trust Beijing. We know that. We are Chinese too."
The fate of Tung is still unclear. Technically, he cannot be replaced by Beijing under the Basic law. He could be pressured to resign, however. So far he has fought to stay despite approval ratings below 10 percent.