What began in Hong Kong as a series of marches against a proposal to allow extraditions to mainland China has grown into a broader challenge to Beijing’s grip on the city. The local government suspended the bill in June and declared it “dead” in July, but protests continued -- as did eruptions of violence in the global financial hub’s streets, subways and airport, resulting in some 1,500 arrests and, in October, the first police shooting of a protester. The bill was finally withdrawn in September, but protesters’ demands have grown to include greater democracy and more. Chinese troop movements have raised questions about how far the central government in Beijing is prepared to go to assert its authority over the city’s 7.5 million people. On a visit to Hong Kong in 2017, President Xi Jinping warned that challenges to China’s rule wouldn’t be tolerated.

1. Isn’t Hong Kong part of China?

Yes, but it’s a semi-autonomous region. The city was an outpost of the British Empire for 156 years, during which time it developed into a global business hub. In a 1984 joint declaration, the British agreed to give the city back in 1997 and China promised to allow a “high degree of autonomy” for 50 years -- until 2047 -- including guarantees of free speech and a free press, capitalist markets and English common law under a “one country, two systems” arrangement.

2. Why are people still protesting?

Even after the extradition bill was suspended, it took Hong Kong’s leader, Chief Executive Carrie Lam, another two months to formally withdraw it from the government’s agenda. During that time, the list of demands expanded. Many protesters have adopted the motto: “Five demands, not one less!” Those are:

• Withdrawal of the extradition bill

• An independent inquiry into police conduct

• Amnesty for arrested protesters, dozens of whom are facing as many as 10 years in prison on a colonial-era rioting charge

• A halt to characterizing the protests as “riots”

• Restart stalled electoral reforms, including direct elections for the city’s leader.

There have also been widespread calls for Lam to resign.

3. What does China say?

The rhetoric has gotten harsher. Yang Guang, spokesman for China’s Hong Kong and Macau Affairs Office, said that “radicals” have committed “serious crimes” and shown signs of “terrorism.” The office has ruled out the demand for direct democracy, and steadfastly defended the police and city government. Chinese officials and state media also have made charges of foreign interference, describing the U.S. as a “black hand” behind the protests -- a claim the State Department has dismissed as “ridiculous.” Chinese officials have warned against challenging the Communist Party’s central authority or the “one country, two systems” principle. The People’s Daily, the party’s flagship newspaper, said that Hong Kong’s top priority was to punish criminal acts and restore social order. At events in Beijing marking China’s Oct. 1 National Day, Xi called for stability in Hong Kong and reiterated support for “one country, two systems.”

4. What does Hong Kong’s government say?

Lam has accepted blame for the unrest and said withdrawing the extradition bill was “a first step to break the deadlock,” but has resisted other demands. She said the rule of law precludes a blanket amnesty -- “You have to take the consequences after breaking the law,” she said at a town-hall style dialogue in September -- and that complaints about police conduct should be handled by an existing commission (United Nations reports have questioned its investigative powers and independence). In a televised address on Sept. 4, Lam said “different constraints and circumstances” prevented her from addressing “all the grievances of people in society.” Days earlier, Reuters reported it had obtained a recording from a private meeting in which Lam said she would quit if she could, and that her ability to resolve the crisis is “very limited” because it has become a national security and sovereignty issue for China. Lam has denied asking China’s permission to resign.

5. How bad might this get?

That depends on China. Troops from its People’s Liberation Army have been in the city since the 1997 handover, but have played a minimal role. Concern has grown that soldiers might be called on to restore order, especially after the garrison posted a video on social media showing Chinese troops practicing riot control. The Hong Kong and Macau Affairs Office has not ruled it out. For some people, the greatest fears are a crackdown mirroring the one three decades ago on mostly student protesters in Tiananmen Square, and a subsequent U.S. withdrawal of the special status under which the Americans agreed to treat Hong Kong as distinct from China for trade and economic matters. In the recording obtained by Reuters, Lam said China wasn’t planning to deploy the army because “the price would be too huge to pay.”

6. Have the protests affected business?

It seems so. The economy was already under pressure from the U.S.-China trade war. Gross domestic product expanded just 0.6% in the second quarter and continued unrest could raise the possibility of a recession, according to Bloomberg Economics. Group tours from the mainland are staying away in droves. Cathay Pacific Airways Ltd. said ticket sales dipped in July and future bookings were hurting. Hotel occupancy rates are falling and visits to Hong Kong Disneyland have suffered. The city’s vital retail sector reported sales by value in August declined 23% year on year, which a government spokesman called the worst ever. Small businesses reported feeling more pessimistic in July than at any time in the past seven years. Richemont, owner of Cartier, echoed Swatch in saying that protests in Hong Kong, the top export market for Swiss watches, weighed on sales. The turmoil also contributed to Temasek Holdings Pte’s decision to put on hold its sale of a $3 billion stake in retailer A.S. Watson Group. Major canceled events include the WTA Hong Kong Tennis Open, a tattoo convention and a one-month run of “Matilda The Musical.”

7. Have protests worked before?

Yes, but less so lately. In 2003 demonstrations blocked a proposed national security law and contributed to the resignation of then-Chief Executive Tung Chee-hwa. Nine years later, high school students, parents’ and teachers’ groups thwarted the Hong Kong government’s attempt to introduce a course lauding China’s Communist Party and criticizing democracy. But the pro-democracy movement fractured after the government successfully faced down student-led demonstrators who occupied city streets for 79 days in 2014, refusing to yield to their demands for direct elections for the chief executive. Since then, China has barred some activists from seeking elected office, prosecuted protest leaders and banned a pro-independence political party.

8. What was wrong with the extradition bill?

Lam cited the case of a Hong Kong man suspected of murder in Taiwan in proposing it. Opponents said it could open the door for anyone -- including political dissidents, civil rights activists, or even foreigners passing through -- who runs afoul of the Chinese government to be arrested on trumped-up charges in Hong Kong and sent to the mainland, where they would face what the U.S. State Department called China’s “capricious legal system.” Critics noted the draft bill assigned to the city’s chief executive -- chosen by a committee stacked with Chinese government supporters -- the leading role in handling extradition requests; currently the legislature can block extraditions.

9. Are there any other potential flash points?

Hong Kong still has to enact national security legislation. Lam has said she wants to create a “favorable social environment” before reintroducing it. Hong Kong is also considering making disrespecting the Chinese national anthem a crime, with prison sentences of as long as three years. And there were protests last year after Lam outlined a project to build artificial islands between Hong Kong island and Lantau to the west. Detractors object to the huge cost and environmental impact. The islands would help accommodate a continuing influx of mainland Chinese, whom many Hong Kong residents blame for rising property prices and overcrowded public hospitals.

--With assistance from Carol Zhong.

To contact the reporters on this story: Fion Li in Hong Kong at fli59@bloomberg.net;Karen Leigh in Hong Kong at kleigh4@bloomberg.net;Iain Marlow in Hong Kong at imarlow1@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Paul Geitner, Grant Clark

©2019 Bloomberg L.P.