Days after the largest mass protests in Hong Kong’s history, Carrie Lam, chief executive of the Special Administrative Region (SAR), has suspended consideration of a proposed law that would allow extraditions from the city to mainland China. The move is prudent, but great damage has been done to Lam’s standing and the proposal has deepened the yawning chasm between Hong Kong residents and the Chinese government in Beijing. More worrisome are potential impacts outside Hong Kong.

An estimated 2 million people — nearly one-third of the Hong Kong population — took to the streets to protest a bill that would allow the city to send criminal suspects to mainland China to face trial. The bill followed a case in which a Hong Kong resident murdered a woman while vacationing in Taiwan, returned home and then admitted to the crime. He could not be charged in Taiwan, nor extradited to the island because Hong Kong has no extradition agreement with Taipei. This bill was intended to remedy that (as Beijing considers Taiwan a part of China, the first step is extradition to the mainland.) While the Beijing government supported the proposal, it has insisted — and Lam acknowledged — that the idea was hers.

The Hong Kong government argued that the circumstances under which extradition would be allowed would be limited. Citizens were skeptical, recalling incidents in which Hong Kong residents were abducted and turned up in the mainland for such “crimes” as publishing books critical of the Communist Party. Protests against the legislation swelled, until as many as 1 million people were demonstrating. Lam suspended consideration of the law, but the following day millions still took to the streets, protesting brutality against demonstrators as well as the government’s arrogance; they want the law to be abandoned.

Even if only temporary, the retreat is a slap in the face of Beijing and Chinese President Xi Jinping. Xi has cultivated the image of a strongman and there is little tolerance for the notion that the Chinese government will allow dissent, even if only in the SAR, where politics are ostensibly protected by the “one country, two systems” model. The last time Hong Kong was rocked by protests was 2014, when millions took to the streets to demand that they, rather than Beijing, pick the city’s leaders. The government cracked down hard, imprisoning leaders of the demonstrations, which may have encouraged a belief in Beijing that it had beaten the movement.

Beijing has held out Hong Kong as an example for Taiwan of the future that it will enjoy after reunification with the mainland. For most residents of Taiwan, the situation in Hong Kong is a warning, not enticement. They see the steady erosion of liberty in the city and the creep of Chinese authority. The attempt to extend Beijing’s legal reach into the city and then the violent crackdown against protests — dozens have been injured and one man fell to his death during a protest — has confirmed for Taiwanese that submitting to Chinese rule would end the lives that they have built and enjoy. Hundreds of protestors gathered in front of the Taiwan legislature shouting “Today’s Hong Kong is tomorrow’s Taiwan.”

There is a chance that Beijing’s retreat will embolden pro-independence activists on the island. At a minimum, it will not help the pro-unification Kuomintang in presidential elections to be held next year. China has been counting on the KMT’s return to power — President Tsai Ing-wen favors independence although she understands the practical limits on that policy — and the unrest makes those odds longer. Unfortunately, Xi has shown mounting impatience with Tsai and the refusal of the Taiwanese people to come around to his perspective. Greater resistance from Taiwan, in combination with that experienced in Hong Kong, will increase pressure on China’s leadership to show strength. If there is a hint of contagion within China itself, Beijing will likely show its muscle and make clear the limits of its patience.

All these contingencies will impact Japan. A harder line against Taiwan threatens confrontation and conflict. Japan will not be able to ignore that crisis. A crackdown against Hong Kong or within China itself raises troubling questions of sovereignty but Japan, like other democratically minded governments, cannot ignore such events if they get bloody. Just as worrisome is the prospect of China searching for foreign scapegoats to distract restive populations and try to rally them around the flag. State Councilor Wang Yi charged “Western forces” with attempting to “destroy Hong Kong’s social stability and the implementation of one country, two systems.”

Japan must defend the rights and dignity of the Hong Kong people — and counsel protestors to accept victory, not push too hard, and not back China’s leadership into a corner — and make it clear to Beijing that the world is watching. The people of Hong Kong have prevailed but this is only a skirmish in a much longer struggle.