The withdrawal of the anti-subversion bill in Hong Kong, two months after the biggest popular protests since the territory's handover to Chinese sovereignty, shows that "People Power" can after all work on Chinese soil.
By Tim Luard
BBC News Online
Beijing will try to look on the bright side and pass it off as a sign that its much touted "One Country Two Systems" formula is in good health and that it is not going to impose its will on Hong Kong's people against their wishes.
But this is nevertheless an embarrassing defeat for the Communist government, which had fought long and hard for the anti-subversion clause to be written into the Basic Law, the mini-constitution drawn up for Hong Kong at the time of its 1997 return to Chinese sovereignty.
Mr Tung had a long, hot summer to consider his next move
Beijing will now do its utmost to ensure that the rest of China's 1.3 billion people do not try to emulate the example set by their compatriots in Hong Kong.
It is also highly embarrassing for Tung Chee-hwa, whose popularity has steadily subsided ever since Beijing chose him as the man it wanted to lead the new Hong Kong after the British left.
He has had a long hot summer in which to consider the tenuous position in which he and his administration were left after the resignation of two key ministers in the aftermath of July's demonstrations.
"The people of Hong Kong were against not just the contents of the Subversion Bill but also the way it was being pushed through", says Dr Joseph Cheng, professor of political science at City University of Hong Kong.
ARTICLE 23 BILL
Outlaws: Reporting state "secrets"
Criticism of Beijing authority
Access to "subversive" material
Threatens currently legal groups, such as Falun Gong
Friday's announcement that the bill was now being indefinitely shelved was a welcome development, Dr Cheng told BBC News Online.
"The administration has finally realised its mistakes", he said.
But Mr Tung is also backing down out of political necessity, say observers.
There was much speculation during the political crisis in July that he might be forced to step down as Chief Executive, after a pro-government party threatened to withdraw its support and end the government's guaranteed majority in the Legislative Council.
He seems to have clung on largely because of the lack of any obvious alternative leader or of any constitutional arrangements to appoint one.
But the signs are that Beijing has reluctantly agreed to continue to support the embattled Mr Tung.
Their joint hope is that the economy will improve in the coming months and that he and his government will be seen in a better light by the time of next year's Legislative Council elections.
Political stability needed
The last thing Beijing wants is for those elections to be dominated by a continuing row over Article 23, the clause in the Basic Law which mandates the anti-subversion legislation.
For the moment, all sides seem to be agreed on the need for a period of political stability.
But Mr Tung made it clear that the subversion bill has only been postponed, not dropped altogether.
China's leaders may have admitted temporary defeat - but they will be as determined as ever for their will to prevail in the end .