The belief was that HK’s economic value to China would protect the one country 2 systems status.
However, the Chinese govt appears to have convinced itself with the rise of its major cities (such as Shenzhen) and general economy that HK isn’t unique, and any economic benefits the political autonomy provides is far outweighed by the political risk and control. The protests, ironically, strengthen this thinking. And they feel they can compensate for the economic losses by simply creating SEZs.
I think the Chinese govt now believes that HK is not really special anymore, and if anything, is probably falling behind other Chinese cities.