by ANDREW BROWNE/ pic by BLOOMBERG

BY DOING nothing, as Hong Kong protesters launch the boldest challenge to the Communist Party’s leadership in three decades, Chinese President Xi Jinping risks looking weak.

That’s particularly true since the popular mood on the mainland has swung sharply against what is widely perceived to be a rich, privileged and arrogant former British colonial outpost that has rejected not just its new masters in Beijing, but also its Chinese heritage. The mob beating of a Chinese reporter and another mainland traveller at Hong Kong’s paralysed airport last week has further inflamed public sentiment.

Yet, if Xi sends in the People’s Liberation Army or paramilitaries to crack down, he would transform one of the world’s leading financial centres into an urban battleground. The resistance would bleed the Chinese economy — Hong Kong still plays a vital role in funding China Inc — and set back China’s soft-power efforts around the world.

Beijing could forget about a peaceful unification with Taiwan. Indeed, a conviction is taking hold among protesters that only the prospect of colossal damage to Hong Kong, as well as to China’s global reputation, stands between the city’s freedoms and a military onslaught.

A message they spray-paint on city walls and pedestrian bridges reveals their desperation: “If we burn, you burn with us.” The ominous quote from “The Hunger Games”, though, doesn’t quite capture Xi’s dilemma. He may well calculate that he could ride out the storm from a military intervention, just as his predecessors shrugged off international sanctions and opprobrium in 1989 after they crushed the Tiananmen Square pro-democracy protests with tanks and machine guns.

The West had far more leverage over a backward China at that time but hesitated to use it; the allure of China’s vast markets eventually triumphed over its impulse to mete out punishment.

Just over a decade later, the US ushered China into the World Trade Organisation. A few years after that, the whole world flocked to Beijing to celebrate the Summer Olympics.

Many in China believe that the killing of hundreds, perhaps thousands, of demonstrators around Tiananmen Square laid the foundation for the political stability on which China’s economic success today is founded.

Still, pacifying Hong Kong would be nothing like bringing the Chinese capital to heel.

Beijing’s broad avenues, straight and flat, were built to accommodate military parades. Hong Kong Island climbs almost vertically from its waterfront along narrow, twisting roads and concrete staircases, while the district of Kowloon across the harbour contains some of the world’s most densely packed housing estates.

Fresh military recruits from the mainland pouring across the border in armoured troop carriers would be met in these neighbourhoods like an invading army. Unlike Beijing residents in 1989, the native Cantonese in Hong Kong would not be easily cowed into submission. The Communist Party lays low in Hong Kong, lacking the organisational cells and networks of spies and informers it deploys in China to root out troublemakers.

Many Hongkongers would fight to defend their way of life, their cultural identity and civic values. Professionals holding foreign passports would flee. Workers would strike. Foreign companies would take off for havens such as Singapore or Bangkok.

Beijing blames what it now calls a “colour revolution” on foreign “ black hands”, a euphemism for meddling Americans. In reality, the Hong Kong protests are homegrown and broad-based, and they are largely the product of intransigence.

Beijing missed repeated opportunities to respond flexibly to peaceful mass protests by reasonable, sophisticated middle-class residents demanding a democratic say in their post-colonial government — an arrangement that Beijing itself promised under the terms of the territory’s handover from Britain. Instead, it imposed a leader selected by a committee packed with pro-Beijing loyalists.

Now, it is faced with flash mobs and Molotov cocktails. At its extreme fringes, the protest movement is pushing for Hong Kong’s independence.

Few doubt that the person ultimately calling the shots in Hong Kong is Xi, not Carrie Lam (picture), the territory’s chief executive who triggered this conflagration by trying to ram through a bill allowing extradition to the mainland. Unless he is prepared to torch Hong Kong, the first thing Xi should do is abandon the lame-duck Lam, whose popularity has sunk to record lows.

He should then give Lam’s replacement the green light to kill the extradition bill and launch an independent inquiry into the actions of police who have outraged the public by firing teargas canisters and other nonlethal projectiles into crowds of protesters at point-blank range, and by appearing to side with pro-Beijing vigilantes.

Next, he could revisit political reform. Full democracy, of course, has always been out of the question. But a measure of representative government ought to be achievable. An administration more rooted in the popular will could set about fixing Hong Kong’s deep-seated economic problems, including unaffordable housing. Political realists will argue that the leader of a Leninist party would never countenance such compromises. In such systems, power is nonnegotiable — “I live, you die” is the ruling creed. And now that the official Chinese media has declared Hong Kong protesters to be akin to terrorists, it shows that Xi and the top Chinese leadership have concluded that force is necessary, even if there’s no consensus on the timing, or whether military intervention will actually work.

If that analysis is correct — and it may well be — this is how one of the world’s greatest new economy success stories will end. — Bloomberg

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.