The CCP can now afford to sacrifice HK, their economy is now much larger than it was in 97.
The GDP size is now among the least valuable aspects of Hong Kong as it pertains to China. That has never been primary.
Hong Kong is the economic staging point that much of the world uses to enter China's economy. Think of it as a translating middleman, that the world uses to convert from foreign market-based economics to China's domestic way of running things as a rigid command economy that is operated by fiat and is often hostile to foreign operators/owners/investors. Hong Kong's role in that respect has been critical to China's economic rise.
I think things escalated in Hong Kong much quicker than the CCP wanted--Shanghai isn't ready to take its place. But Shanghai is the long game, and business leaders in HK know that.
HK has grown since 1997, but China has gotten so much richer that HK is now basically economically irrelevant to the mainland.
As far as the mainland is concerned, Hong Kong is now only a political issue.
In the past, yes. Nowadays Hong Kong's financial importance is rapidly diminishing. In 1997 Hong Kong compromised 19% of China's GDP, today it's ~2%.
FDI is still predominantly channeled through Hong Kong, but with 35 billion last year the general role of FDI is actually pretty negligible compared to the size of the domestic economy, and it looks like Shenzhen and Shanghai are well on their way to replace the city.
"The chief executive of the London Stock Exchange dismissed Hong Kong’s significance as a financial centre when the LSE rejected a takeover offer from the Hong Kong Exchange. “We view Shanghai as the financial centre of China,” David Schwimmer, the LSE’s chief executive, told the South China Morning Post."
https://www.ft.com/content/2c4c56bd-1c40-3261-8ba8-f3ce8c83e...