China has its red lines, and Hong Kong is treading close to them. But the city is a special case; it’s dollars and oxygen. Hong Kong affords mainland tycoons the ability to move “red capital” in and out. The city, the world’s third-largest financial center, provides access to international capital markets. It even offers honest courts and judges. And so China is likely to play a waiting game.

A second Tiananmen in Hong Kong would be a horrific gamble that perhaps only armed insurrection or an outright push for independence would provoke. Gradual infiltration of the increasingly brutal Hong Kong police by mainland paramilitaries is an obvious alternative. But it’s not a solution. Beijing’s dilemma is that “one country, two systems,” always an exercise in creative ambiguity, is broken.

The model, agreed upon for the British handover of sovereignty to China in 1997 and supposed to last until 2047, is now almost halfway through its putative life. The limits of its internal contradictions have been reached. It would have been one thing if China had moved in the liberal direction many expected; it’s quite another when Xi’s rule grows ever more repressive and an estimated one million Muslim Uighurs in China’s Xinjiang region undergo Orwellian re-education in camps.

“The problem is the idea of a half-century of no change begins to feel like handcuffs,” Teresa Ma, a Hong Kong lawyer and mediator, told me. “Our society has evolved, but our government is utterly unresponsive.”

Hong Kong’s restiveness has many roots: rising inequality, unaffordable housing, diminishing prospects for young people, dithering governance, a sense of marginalization as China rose. The city represents 2.7 percent of Chinese gross domestic product today, compared with 18.4 percent in 1997. Shenzhen, just over the border, was a cow town three decades ago; now it glistens and gleams, a high-tech hub.

Freedom versus repression is not the whole story of the protests. Many frustrations have found an outlet in demonstrations that have turned violent at times. But it is the essence of the story.

Only the tone-deaf insensitivity of Lam, the city’s chief executive, pushed Hong Kongers into open revolt in June. Her administration’s proposal for an extradition bill would have meant game over for Hong Kong. This city knows as no other that the rule of law and an independent judiciary are the basis of its prosperity. Allowing criminal suspects to be sent into the one-party lawlessness of mainland China would have nixed that. “The spirit of the rule of law is in the blood of the Hong Kong people,” Benny Tai, an associate law professor at the University of Hong Kong, told me.