It took something out of the ordinary to provoke a million people in Hong Kong to take to the streets to demonstrate against proposed new extradition rules. Roughly one-sixth of the population demonstrated peacefully: families, young and old, lawyers, academics, students, professionals and manual workers.

What caused such an outpouring against a piece of legislation? Quite simply, the people of Hong Kong – not British, but Hong Kong Chinese – have seen their government connive with the Communist regime in Beijing to undermine their way of life and freedoms.

Britain’s departure from Hong Kong in 1997 – a colony we acquired in woeful circumstances – was done on the basis of a brilliantly imaginative proposal put forward by former Chinese leader Deng Xiaoping. Hong Kong would return to the control of mainland China, but on the basis of “one country, two systems”. Hong Kong’s high degree of local autonomy would continue to be based on the rule of law and on the freedoms associated with a plural open society.

By and large things did not go too badly in the 10 years or so after the UK left Hong Kong. China, on the whole, kept its word which had been incorporated in a document called the joint declaration, which was lodged as an international treaty at the United Nations. The idea was that Hong Kong would remain as it was until 2047.

Some things were unsatisfactory. The Communist party, for example, throttled back on the promises it had made about Hong Kong’s nascent democracy. But overall there was not too much to grumble about, and when the local government pushed too hard to do Beijing’s bidding – for example over introducing more “patriotic” themes into education – public protests forced a change of mind.

But two things have happened in recent years. First, Xi Jinping was made party and state leader and given greater powers. He has exercised these to row back on many of Deng’s reforms, to increase central control and tackle any signs of dissent within China. Second, the leadership was plainly rattled by the massive demonstrations that took place in 2014 against further efforts to prevent democracy flowering in Hong Kong.

Since then things have gone from bad to very bad to even worse. The leaders of the demonstrations in 2014 have been pursued – even five years after the event – with reckless, vengeful enthusiasm, using ancient and often obscure colonial-era public order legislation. People with the “wrong” views have been banned from political activity. Freedom of speech has been whittled away in the media and in universities. Beijing has even abducted individuals from Hong Kong and taken them back to the mainland.

This is the background to the current row over a law that would allow extradition to the mainland of those Beijing does not like.

Protesters below a photo of Hong Kong’s chief executive Carrie Lam with the words “Step down”. Photograph: Vincent Yu/AP

Why is this such a fundamental issue? The answer is simple. It demolishes the firewall between the rule of law in Hong Kong and what passes for the law in China, where there are no independent courts and where the law is basically whatever the Communist party wishes it to be. The purported excuse for the change was a case involving an alleged murderer whose crime had been committed in Taiwan. Beijing said that showed there was a loophole in the law and that it could only be dealt with by extradition. But 12 former chairs of the Hong Kong Bar Association pointed out that this particular case could have been dealt with in other ways, as happens with other common law jurisdictions. We had always realised that an extradition agreement with China would drive a stake into the heart of “one country, two systems”.

Malcolm Rifkind, who was foreign secretary in the run-up to the handover, has helpfully drawn attention to the now unclassified documents which make the UK government’s position in the 1990s plain. Among many statements which could be cited was this: “It is government policy to only enter into extradition arrangements with governments whose judicial system, penal conditions, human rights standards are of an acceptable level.” The arrangements were not at an acceptable level in the 1990s and they certainly are not acceptable today.

What are the possible implications if the Hong Kong government does not take a step back from what is proposed? First, there will be continuing and understandable unrest in the city. People will lose faith in the institutions of their government and become increasingly nervous about their prospects and those of their children. Second, Hong Kong’s reputation as an international commercial and trading hub will be damaged. At the moment the rest of the world sees Hong Kong as different from the rest of China because it has the rule of law. It will be enormously damaging if Hong Kong is viewed commercially as no different from any other city in China.

So what should happen now? Governments around the world – particularly Britain – should make our views clear about what is happening. And the government in Hong Kong and its masters in Beijing should realise how much damage will be done to Hong Kong if it continues to think it can brazen things out, turning to tear gas and rubber bullets to get its way. The violence we have now seen is not acceptable. It is inevitable that young people will go too far when peaceful demonstration seems to be ruled out. Attacking police officers is wrong. But worse still is the totally excessive use of force by the police which has been condemned by human rights organisations. There should be a public inquiry into these public order issues.

Carrie Lam and her government should postpone the continuing passage of the legislation and have further talks with representatives of the community: lawyers, business people and representatives of civil society. If the regime in Beijing knew the difference between propaganda and public diplomacy, this is what it would encourage itself. Chinese leaders should perhaps ask themselves why it is that since the return of Hong Kong to Chinese sovereignty, a completely new independence movement has emerged in Hong Kong, something that I and many other supporters of democracy have always criticised.

As the former sovereign power, Britain has a debt of honour to Hong Kong. I hope that does not sound too old-fashioned a concept these days.

For China, what is at stake is whether in future the rest of the world will be able to trust it to keep its word. If it breaks its commitment to Hong Kong, where else can it be trusted? Sometimes it is difficult to avoid the rather gloomy thought that we are seeing the emergence of a superpower that does not believe in individual human rights. So much for the China dream.

• Chris Patten was the final British governor of Hong Kong, from 1992-97