Similarly, this is one of the first major crises to emerge since the establishment of a “State Security Commission” at the Third Plenum of the 18th Party Congress earlier this year. The State Security Commission was established in order to improve Chinese decision making in a crisis, bringing together leaders of key departments and ministries, much like the American National Security Council. Since the Commission is reportedly responsible primarily for internal security matters, Hong Kong developments are likely to fall under its jurisdiction. However, there have been few reports on whether the State Security Commission has been meeting on developments in the HKSAR, and on what role it is playing. How the Commission handles this baptism of fire (if it is charged with dealing with it at all) will likely signal how well it can streamline and facilitate Chinese crisis management and decision making.

The Stakes for Xi

Unfortunately for Xi, the stakes involved in his first crisis are enormous. Xi’s internal credibility is likely to be on the line, which is likely to affect both his ability to effect economic reform (widely recognized as essential, as China’s economy slows down), and to influence the composition of the next leadership cohort. If he cannot maintain order in Hong Kong, his ability to influence the rest of the Chinese Communist Party leadership will inevitably be called into question.

But a heavy-handed reliance on force would likely destabilize Hong Kong and jeopardize its credibility as one of the world’s major financial centers. Despite the shrinking relative advantage, Hong Kong remains a central source of foreign direct investment into China, especially as other sources have declined. In 2013, over half of all foreign direct investment into the PRC came from the territory. Any long-term disruption of the HKSAR’s operations would likely have serious negative consequences for the larger Chinese economy.

Moreover, Hong Kong has often been seen as a test case for relations with Taiwan. An unsatisfactory resolution of the situation, never mind a bloody one, would cripple cross-straits relations, just before the 2016 elections on the island, when neither the Kuomintang, nor the Democratic Progressive Party (DPP) will be fielding an incumbent. An abject failure of “one country, two systems” in Hong Kong would likely benefit the DPP, which has solidly supported independence, potentially precipitating greater cross-straits tensions.

The people of Hong Kong have a lot riding on the outcome of the current protests. But the stakes are also high for mainland leaders—most especially Xi Jinping—whose political and crisis-management skills will be tested to the utmost.

Dean Cheng is a senior research fellow specializing in Chinese political and security affairs at The Heritage Foundation’s Asian Studies Center.

Image: Flickr/Chairman of the Joint Chiefs of Staff/CC by 2.0