There has been tear gas and a running battle on the streets. Hong Kong airport was closed down. China's warnings to the protesters are getting louder and fiercer.

There are hundreds of armoured paramilitary police vehicles parked in a stadium just outside Hong Kong if China decides to crack down.

We look at the background - and what might now happen.

Hong Kong consists of little more than a thousand square kilometres of densely populated islands and mainland sticking out from the southern coast of China.

It was a British colony from 1841, but only on a fixed term lease from China.

London and Beijing agreed that there would be "one country, two systems" when the British colony was handed back to China at midnight on July 1, 1997.

Hong Kong would be Chinese but the civil rights of its people would be protected. Accordingly, Hongkongers enjoy much more freedom in the territory than do Chinese citizens on the mainland.

Some Hongkongers fear that Beijing wants to erode their freedoms - like the freedom to criticise the government in Beijing. There is a relatively free press in Hong Kong. Dissent and discussion are open.

They are not in mainland China where the rule of the communist party is absolute. According to Human Rights Watch, people are detained "incommunicado" and "without fair trial procedures."

In mainland China, there is a history of jailing human rights lawyers and repressing journalism. Censorship is fierce.

In February, the Hong Kong government proposed a change in the law so that Hongkongers could be extradited to mainland China if they faced accusations of crime. There is currently no extradition agreement between Hong Kong and the mainland.

The government said this was merely about plugging a loop-hole but some Hongkongers believed that the change would allow anyone to be deported to the mainland where they might well disappear.

It would, they feared, be easy for the authorities in Hong Kong to accuse difficult pro-democracy activists of a crime and then extradite them.

As the Hong Kong government (which its critics accuse of serving Beijing) pushed through the change, millions of protesters came out on to the streets. The Hong Kong government's chief executive, Carrie Lam, then suspended the bill.

Democracy activists noted that the bill wasn't abandoned altogether.

And protests take on a life of their own. They are often not about specific demands but occur when anger boils over. They have a momentum of their own.

The police in Hong Kong reacted with some violence to the protests. Some believe that thugs who attacked protesters were employed by the police. This may have strengthened opposition.

The protests may fizzle out - it is not a revolution - but it is hard to see how the strong anti-Beijing feeling will disappear, particularly if another attempt is made to resurrect the extradition law.

Beijing may target leaders of the protest but the numbers are too great to target all - an estimated two million have protested out of a population of seven million. By the way, protesters use lasers to confuse facial-recognition cameras.

Other pressure could be used. The Hong Kong-based airline, Cathay Pacific, told its staff that they would be sacked if they took part in protests. The airline which has a big market on mainland China acceded and warned staff.

On June 4, 1989, People's Liberation Army troops shot protesters in the middle of Beijing. The regime ordered that the square be cleared by any means necessary. Estimates of the dead range from hundreds to thousands.

But Hong Kong is not central Beijing. It is recognised as different - "one country, two systems" - so protest doesn't threaten Beijing's control to quite the same degree.

But if protests turned into a direct threat to the very rule of Beijing, the communist leadership would no doubt get very heavy indeed. If protest started spreading to mainland cities, for example, or started shutting down the Hong Kong economy, a harder line would be taken.

Chinese President Xi Jinping must be weighing up whether "lancing the boil" quickly, with many, many deaths, would be effective. Thirty years after Tiananmen Square, the subject is still banned from discussion in China.

The protesters have another strong-ish card, and that is that Hong Kong is a financial hub of China (along with Shanghai).

Western companies are there because the rule of law is respected. Contrast this with Russia where outside companies had assets confiscated if they displeased the Kremlin. Some companies now steer clear of Russia.

Would western executives feel comfortable in their air-conditioned offices on Kowloon Island if blood was flowing in the street outside?

Australia is a democracy and democracies value freedom of speech and the rule of law.

But there is also a more direct reason to care. Nobody doubts that China is increasingly flexing its power. It is creating islands with military capabilities in disputed waters which are important to Australia.

A China expert, Gerry Groot of the University of Adelaide, believes that Chinese pressure can already be detected in Australia. "The marginalisation of sensitive issues like Taiwan among Chinese-Australian communities, the lack of support for China's Muslims and other persecuted religious minorities, and the very muted responses to the protests in Hong Kong, seems to indicate that these efforts are bearing fruit."

The Department of Foreign Affairs and Trade has two parts to its title - the diplomatic role but also the economic one.

Can Australia keep making money from the huge Chinese market without kowtowing to despots? There are hard choices ahead.